Analysis of the Characteristics of the Medical Industry and the Determinants of Investment: Focusing on South Korea-U.S. FDI

Purpose - This study analyzes the current status, background, and factors that affect the maintenance and success of the South Korea-U.S. medical foreign direct investment (FDI), which has been rapidly increasing since the COVID-19 pandemic. Design/Methodology/Approach - This study was conducted from the perspective of the United States (U.S.), the host country of investment. A panel analysis was conducted with the 10-year data of economic and logistics factors of 30 major U.S. states. The independent variables were Gross domestic product (GDP), payroll, and employment rate, and logistics factors were the number of logistics bases and amount of investment. The dependent variable was the amount of South Korea-U.S. medical FDI. Findings - The empirical analysis revealed that GDP, payroll, and number of airports had significant positive effects on FDI. The medical industry is a typical high value-added process industry, and the economic power of the host region and payroll to employ excellent workers were key variables. Air transport infrastructure was also a prominent factor due to the nature of pharmaceutical drugs. Research Implications - The analysis results show the typical characteristics of the medical industry. The results and implications can guide future medical FDI in a more effective direction.