earticle

영어

This study examines the impact of economic policy uncertainty on Korean firms’ f oreig n direct investment(FDI). From 2007 to 2018, FDI is classified into investment balance, number of affiliates, average investment balance, and number of affiliates per country. The results of the fixed-effects model show that economic policy uncertainty affects firms’ investment activities. Global economic policy uncertainty hurts the number of affiliates per country. In contrast, Korean economic policy uncertainty positively affects the investment balance and the number of affiliates per country. A higher wage level of the parent firm increases a firm’s FDI, and a higher capital intensity positively affects FDI. Higher labor productivity i n SMEs a nd l ow-tech manufacturing harms FDI. This sugg ests g overnments s hould support firms’ FDI activities by providing a stable policy environment.