In this study, we investigate the effects of foreign direct investment (FDI), domestic direct investment (DDI) and export by Korean firms, both listed and non-listed as well as manufacturing and non-manufacturing firms, on their job creation and substitution effects, by using 47,298 observations of 11,985 firms provided by the Korean Bureau of Statistics from 2009 to 2013 using fixed effects panel regression models. Results show that there exists a substitution effect of FDI activities of Korean firms on job creation, and this is statistically significant only for both manufacturing and non-manufacturing firms and for non-listed firms. In addition, there also exists a substitution effect of DDI activities on job creation, statistically significant for both manufacturing and non-manufacturing firms as well as KOSPI-listed, KOSDAQ-listed and non-listed firms. However, exports do not show statistically significant effects on job creation for both manufacturing and non-manufacturing firms though manufacturing firms show a positive effect on job creation relatively. The results imply that the government should support firms to stay in Korea and generate jobs through establishment of subsidiary firms domestically, in oder not to go abroad especially for non-listed firms.
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