The discussion on the side effects of offshoring and reshoring has gained momentum since the 2010s, leading to an increasing need for related research. This study analyzed 1,200 multinational corporations in South Korea from 2008 to 2019, classifying their investment types into four categories: (i) expansion with investments in both domestic and foreign markets (expander), (ii) offshoring with reduced or withheld investments domestically while investing abroad (offshorer), (iii) reshoring with reduced or withheld investments abroad while investing domestically (reshorer), and (iv) retention or downsizing with reduced or withheld investments in both domestic and foreign markets (idler). The study examined the characteristics of firms for each investment type, factors influencing investment type decisions, and the overall investment trends.

During the sample period, the overall trends of the four investment types remained relatively stable and evenly distributed. Offshorers and reshorers accounted for approximately 20% and 24% respectively. Moreover, around 40% of reshorers repeated the same investment strategy in the following years, indicating persistence in their decision-making.

Reshorers experienced short-term growth in revenue and employment, but their productivity growth rate was the lowest. Additionally, their activities in the foreign market, such as exports and imports, also decreased. This suggests a high likelihood that the observed short-term growth may not be sustainable. On the other hand, offshorers had a faster growth rate in productivity but had a negative impact on domestic employment. Offshoring and reshoring were thus economically conflicting.

The analysis of factors influencing investment type decisions revealed that expanders showed significantly higher numbers in size, productivity, and R&D investment compared to other investment types. Following expander, offshorer, reshorer, and idler exhibited lower levels of productivity in that order, highlighting the importance of productivity in investment type decisions. Reshorers had relatively high labor intensity, limited experience in overseas production activities, and their investment destination country was closer to South Korea. This suggests that firms with lower fixed costs of foreign investment and less burden in returning to the domestic market tend to choose reshoring as their primary option.

Reshoring policies have gained popularity in major advanced countries due to reasons such as national security, supply chain stability, and promotion of domestic employment. South Korea is also pursuing related policies. However, considering the characteristics of firms engaging in reshoring, it is desirable for the policy to aim at assisting reshoring firms in increasing productivity and eventually transitioning into expansionary investment firms, rather than focusing solely on reshoring itself.

Preface
Executive Summary

Chapter 1 Introduction

Chapter 2 Concepts of Offshoring and Re-shoring and Related Literature
　Section 1 Concepts
　Section 2 Related Literature

Chapter 3 Trends and Characteristics of Corporate Investments in Korea
　Section 1 Measurement Methods
　Section 2 Trends and Characteristics of Offshoring and Re-shoring

Chapter 4 Factors Influencing Offshoring and Re-shoring
　Section 1 Hypotheses and Model Setup
　Section 2 Analysis Results

Chapter 5 Conclusion and Policy Implications

References
Appendix