China’s economic growth and wage hikes, and prolonged trade friction between the U.S. and China, have weakened China’s advantage as a production base hub, and increased the need for post-China production bases. As a result, ASEAN has emerged as a major global investment destination based on its cheap labor, and the trend of global companies relocating their production bases to ASEAN will likely become more pronounced. Amid this trend, Korean companies are also actively investing in ASEAN, and Korea’s accumulated investment in ASEAN from 1980 to 2018 has grown to an extent comparable to China’s accumulated investment.
   With ASEAN emerging as South Korea’s main investment destination, the need for research on the performance of ASEAN investment has been raised. However, due to the lack of micro data, it is difficult to conduct an empirical analysis of this investment based on data. The Export-Import Bank of Korea has the most reliable information on companies’ overseas investment, but does not provide micro data due to the confidentiality clause of Article 22 of the Foreign Exchange Transaction Act. Meanwhile, the corporate activity survey published by the National Statistics Office of Korea provides data on companies with more than 50 employees, but has the disadvantage of lacking information on small businesses.
   The purpose of this study is to establish integrated data linking the data of overseas companies and domestic parent companies to address these limitations. Once the data is collected according to the purpose of this study, it will become possible to analyze the characteristics and impact of domestic companies’ investment in ASEAN. For this purpose, we use overseas companies data and Korea Enterprise Data (KED) released by the Korea Trade-Investment Promotion Agency (KOTRA).
   The research can be summarized as follows. In Chapter 2, we look into the trends and structure of Korea’s investment in ASEAN. Korea’s accumulated investment amount in ASEAN during 2015-18 recorded 54.5 billion USD, accounting for approximately 14% of Korea’s total outward direct investment. In the same period, the annual average of Korean FDI outflows to ASEAN increased by 17%, largely outpacing the average annual growth rate of 4% in investments to China. Korea’s major sectoral investment in ASEAN has been diversified from manufacturing into finance, insurance, wholesale, retail, and mining, mainly focused on Vietnam.
   Chapter 3 introduces the methodology and basic statistics of the KOTRA Overseas Enterprises Data and Korean Enterprises Data. The KOTRA Overseas Enterprises Data has information on parent companies and we have combined KOTRA’s data with parent companies’ corporate registration number as a parameter. Korean firms mostly advance into ASEAN as an independent investment for production, concentrating on manufacturing and business services. In addition, utilities companies with overseas subsidiaries show the highest average capital and sales.
   In Chapter 4, the current status and characteristics of Korean investment are analyzed based on the KOTRA Overseas Enterprise Data combined with the corporate registration numbers of parent companies. The analysis shows that Korean firms are mainly expanding into China and Southeast Asia. While the number of Korean enterprises entering China is significantly changing by year, the number entering into ASEAN shows steady growth. The Korean enterprises are mostly advancing into ASEAN in the garment manufacturing industry, which indicates a difference in the level of productivity between China and ASEAN since most Korean firms producing electronic components and telecommunications equipment choose to enter China. The parent companies expanding into both China and Vietnam have higher average sales and profit but the enterprises entering only Vietnam recorded lower figures.
   This research is meaningful in that it has established a database which allows us to examine various dynamics of Korean companies that have advanced overseas. However, the established database has certain limitations, such as missing accurate information for identifying parent company. For future policy research, it will be necessary to collect specific parent identification information, add additional overseas subsidiaries’ information, and expand its time series.
   Through this study, we analyzed the characteristics of Korean companies operating in Southeast Asia and the financial performance of their parent companies. Based on the database established through this study, various analyses are available through future research, such as the impact of foreign direct investment on domestic employment and industrial competitiveness, the relationship between increasing cost of overseas production and the financial performance of the parent company, and the effectiveness of government policy on companies advancing overseas.