We investigate the resource transfer through intra-group transactions of foreign direct investment (FDI) firms with their foreign subsidiaries and its effect on firm value. Employing extensive intra-group transaction data of Korean FDI firms constructed by the matching sample approach, our results uncover strong evidence of resource transfer by FDI firms to their foreign subsidiaries. We find that a larger Korean FDI firm with a higher debt ratio, a higher R&D ratio, a higher export ratio, and/or a lower import ratio are likely to engage in more intra-group transactions with its foreign subsidiaries. More importantly, we show that intra-group transactions with foreign subsidiaries reduces firm value, and this association is significantly related with the size and technology level of the investing firm and the economic nature of the host country of foreign subsidiaries, but insignificantly to the ownership structure of the foreign subsidiary. The overall results of our paper offer evidence that Korean FDI firms use the intra-group transactions primarily as a means of propping their poor-performing foreign subsidiaries.