Technology Transfer and Organizational Learning through Foreign Direct Investment: Partnership between European and Korean Firm

Considering the recent trend of foreign direct investment (FDI), this paper highlights FDI by the European companies in Korea in the e-Business field and IT industry. In these fields both European and Korean companies enhance their competitiveness by sharing their expertise with each other. Traditional FDI theories are not satisfactory to explain these new FDI motivations. A new approach, an extended version of the imbalance approach, is introduced to explain these new phenomena. According to this approach, companies get access to new advantages through FDI or strategic partnership, in contrast with the traditional theories, arguing that companies go abroad because they have advantages. Relating to this new approach, some case studies are conducted and important implications are provided.