After the 1997 foreign exchange crisis, foreigners gained 87 billion dollars and 235 billion dollars from direct investment and stock investment in Korea respectively, while Korea gained 14.5 billion dollars and lost 5.2 billion dollars from direct in...
After the 1997 foreign exchange crisis, foreigners gained 87 billion dollars and 235 billion dollars from direct investment and stock investment in Korea respectively, while Korea gained 14.5 billion dollars and lost 5.2 billion dollars from direct investment and stock investment abroad respectively. The difference between the foreigners’ gains in Korea and Koreans’ gains abroad will drive a wedge between Korean GDP and GNI sooner or later. The difference in gains comes from the fact that, for a few years after the crisis, the difference in the rate of return between foreign investment in Korea and Korean investment abroad was very large. The gap is narrowing afterwards, but has not disappeared yet.