Most traditional theories of foreign direct investment (FDI) do not deal with how firm-specific competitive (or ownership) advantage is created or augmented and are therefore limited in their ability to explain the emergence of latecomers, such as Korea, in international markets. Some theories begin by outlining the existing ownership advantages of a firm or they explain that firm-specific ownership advantages are developed internally through experience (Cantwell 1991). Others, such as Porter’s Diamond (1990), list the conditions conducive to the creation of international competitive advantage. The experiences of Korean automobile companies do not fit neatly into these models. They did not have any substantial firm-specific ownership advantages when they started exporting in the international market in the early 1980s and most of the conditions in Porter’s Diamond were not easily identifiable in the Korean automobile industry. Yet, the Korean auto industry has become one of the strongest competitors to the Japanese automobile companies.