This empirical study shows FDI outflows in Korea as contrast with FDI inflows during the past 18 years. Then it analyzes changes in patterns of FDI by Korean firms in terms of various factors such as the size of firm, FDI type, equity ownership, host ...
This empirical study shows FDI outflows in Korea as contrast with FDI inflows during the past 18 years. Then it analyzes changes in patterns of FDI by Korean firms in terms of various factors such as the size of firm, FDI type, equity ownership, host country, investment objective, and industry type during the period.
Major results of this study are as follows:
Firstly, since the 1990s the portions of FDIs by big and small and medium-sized companies, particularly big companies, have been decreasing while that of FDIs by personal companies. Secondly, FDIs in the form of green-field investment have been overwhelmingly preferred over those in the form of acquisitions, but in the recent years the latter has increased. Thirdly, Korean firms have tended to prefer 100% equity ownership for their foreign subsidiaries to joint ownership. This tendency has been strengthened for the past 10 years. Fourthly, the preferred countries for FDI by Korean firms are the U.S. and China, Recently, China has captured the first place as a host country for Korean parents over the U.S. Fifthly, the procurement of resources was one of the most important objectives of FDI by Korean firms until the early 1990s, hut since then the promotion of exports and the exploitation of low labor costs have been two of the most important purposes for FDI by Korean firms. Finally, the portion of service industries has been increasing while that of the manufacturing industry decreasing since the mid-1990s, and among the manufacturing industry the heavy chemical and engineering industry has replaced the textiles and garments industry in leading FDI by Korean firms.