The Impact of COVID-19 Pandemic on Firm Internationalization and the Role of Ownership Concentration: Evidence from Korea

Purpose: This study examines the impact of the COVID-19 pandemic on firm internationalization and investigates the role of ownership concentration in moderating the relationship between the COVID-19 pandemic and firm internationalization. Design/methodology/approach: The degree of firm internationalization is proxied by the ratio of foreign sales to total sales. An indicator variable, assigned a value of 1 for firm-years within the COVID-19 period (2020-2021), serves as the independent variable. Utilizing a sample of 3,046 firm-year observations from Korean listed manu-facturing firms spanning 2017 to 2021, this study explores the effect of ownership concentration on the relationship between the COVID-19 pandemic and firm internationalization, incorporating both ownership concentration and its interaction with the COVID-19 indicator in the regression model. Findings: The results reveal that the COVID-19 pandemic has a negative impact on firm internationalization. Furthermore, this negative effect is mitigated by a concentrated ownership structure. Research limitations/implications: This study provides insights into the impact of the COVID-19 pandemic on firms’ operations and offers practical implications for firms seeking to reduce the negative impacts of the pandemic and promote firm internationalization This study quantifies firm internationalization using two distinct proxies but does not address qualitative dimensions such as mode of entry and geographical diversification. Future research that includes these qualitative factors could substantially enhance the depth and breadth of the existing literature. Originality/value: While existing studies have highlighted the significant correlation between supply chain risks and firm internationalization, they have not explored the effects of COVID-19—a crisis that led to a comprehensive economic suspension—and have overlooked the influence of ownership concentration. Therefore, this study contrib-utes valuable insights into the repercussions of the COVID-19 pandemic on firms’ operations and offers practical implications for firms aiming to mitigate the adverse effects of such economic disruptions and enhance firm internationalization.