Patterns of South Korea's foreign direct investment flows into China

Asian Survey

Volumn 46, Issue 6, 2006, Pages 881-897

  Kim, Eun Mee ^a   Mah, Jai S ^a  

^a Ewha Womans University   (South Korea)

Author keywords

China; Foreign direct investment; Korea

Indexed keywords

CAPITAL FLOW; DEVELOPING WORLD; ECONOMIC GROWTH; EXPORT; FOREIGN DIRECT INVESTMENT;

ASIA; CHINA; EURASIA; FAR EAST; KOREA; SEOUL [SOUTH KOREA]; SOUTH KOREA;

EID: 33846056628     PISSN: 00044687     EISSN: None     Source Type: Journal    
DOI: 10.1525/as.2006.46.6.881     Document Type: Article

References (40)

1. A. Bitzenis, "Universal Model of Theories Determining FDI: Is There Any Dominant Theory? Are the FDI Inflows in the CEE [Central and Eastern European] Countries and Especially in Bulgaria a Myth?" European Business Review 15:2 (1996), pp. 94-104.
2. Il Sakong, South Korea in the World Economy (Washington, D.C.: Institute for International Economics, 1993).
3. Eun Mee Kim, "Globalization of the South Korean Chaebol," in South Korea's Globalization, ed. Samuel Kim (New York: Cambridge University Press, 2000), pp. 102-25. Inward foreign direct investment (FDI) is defined as FDI invested by foreign investors into Korea and outward FDI denotes FDI by Korean investors into foreign countries.
4. Korea Export-Import (EXIM) Bank, Hanguk-eu Jungguke Daehan Haewejikjuptooja [South Korea's OFDI in China] (Seoul: Korea EXIM Bank, 2005).
5. Emerging market is defined differently by many institutions and scholars. The most commonly used definition is an economy with a gross domestic product (GDP) per capita of less than USS8,000 (World Bank) with a great potential for rapid industrialization (see Zillur Rahman and S. K. Bhattacharyya, "Sources of First Mover Advantages in Emerging Markets - an Indian Perspective," European Business Review 15:6 (2003), pp. 361-71
6. Moin Siddiqi, "The Paradox of Emerging Markets," African Business 267 (2001), pp. 16-18
7. D. J. Arnold and J. A. Quelch, "New Strategies in Emerging Markets," Sloan Management Review 40:1 (1998), p. 7.
8. "Emerging markets are by definition small, but potentially dynamic and rapidly growing economies, where institutional investors and multinational corporations (MNCs) can seek lucrative opportunities for medium to long/term investments" (Siddiqi, "The Paradox," p. 16).
9. J. Jackson, "U.S. Direct Investment Abroad: Trends and Current Issues," Congressional Research Service, CRS Report RS21118, Washington, D.C., April 29, 2005.
10. In the current paper, South Korea is considered as a developing country, as is the case, for instance, in the World Trade Organization system.
11. United Nations Conference on Trade and Development (UNCTAD), World Investment Report (Geneva: UNCTAD, 1981, 1985, 1990, 1995, 2000, 2005).
12. Ibid., World Investment Report 2000, Geneva: UNCTAD, 2000.
13. Ibid., World Investment Report 2005, Geneva: UNCTAD, 2005.
14. Korea EXIM Bank, Hanguk-eu-haewejikjuptooja, April 2005.
15. June-Dong Kim and In-Soo Kang, "Outward FDI and Exports: The Case of South Korea and Japan," Journal of Asian Economics 8:1 (1997), pp. 39-50.
16. "Flow" of OFDI denotes the amount of OFDI during a year, while "stock" denotes the amount outstanding at the concerned year, i.e., the amount accumulated from preceding years.
17. In the aftermath of the financial crisis, South Korea's OFDI fell noticeably. The number of affiliates investing abroad in 1998 was only half of that in 1996, and the total volume of investment decreased by 26% in 1999 as compared to the pre-crisis level.
18. Korea EXIM Bank, Hanguk-eu;
19. and Bank of Korea (BOK), "Economic Effect of Overseas Direct Investment," Monthly Bulletin (2002), pp. 23-49.
20. R. Van Hoesel, New Multinational Enterprises from South Korea and Taiwan - Beyond Export-led Growth (New York: Routledge, 1999).
21. Korea EXIM Bank, Haewejikjuptooja, 2004.
22. Prema-chandra Athukorala and Hal Hill, "Host-country Impact of FDI in East Asia," in Foreign Direct Investment: Research Issues, ed. Bijit Bora (New York: Routledge, 2002).
23. Korea EXIM Bank, Haewejikjuptooja, 2001 and 2004.
24. Descriptions regarding institutional changes in the FDI flows into China are drawn from Chung Chen, Lawrence Chang, and Yimin Zhang, "The Role of Foreign Direct Investment in China's Post-1978 Economic Development," World Development 23:4 (1995), p. 692
25. Michael J. Twomey, A Century of Foreign Investment in the Third World (London: Routledge, 2000), p. 116
26. Seungrok Park, Joong-Gukeu Kyungjesugjanggwa Haewejikjuptoojaeu Yukhal [Chinese economic growth and the role of FDI] (Seoul: Korea Economic Research Institute, 2002), pp. 21-23
27. and Ding Lu, "Revamping the Industrial Policies," in The Globalization of the Chinese Economy, eds. Shang-Jin Wei, Guanzhong J. Wen, and Huizhong Zhou (Northampton: Edward Elgar, 2002), p. 22.
28. Lu, "Revamping the Industrial," p. 22.
29. Sang Kook Han, Joong-guk Josejedowa Joong-guke Daehan Haewetoojajareul Wihan Jose-moonje [Chinese tax systems and tax problems for investors investing in China] (Seoul: Korea Economic Research Institute, 2004), p. 27.
30. Korea EXIM Bank, Hankook-eu-haewejikjuptooja, April 2005.
31. Mansoo Jee, Hankookeu Jung-guke Daehan Haewejikjuptooja [South Korean FDI into China: A regional approach] (Seoul: Korea Institute for International Economic Policy, 2002), p. 77.
32. Korea EXIM Bank, Haewejikjuptooja, 2004.
33. Korea EXIM Bank, Hanguk-eu, p. 7
34. and Jee, Hankookeu Jung-guke Daehan, p. 81.
35. Korea Customs Service, Statistical Yearbook of Foreign Trade (Seoul: Korea Customs Service, 1994, 2004).
36. Korea EXIM Bank, Hanguk-eu.
37. Han, Joong-guk Josejedowa, p. 29.
38. The members of ASEAN increased from six economies, i.e., Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand, to ten with the addition of Cambodia, Laos, Myanmar, and Vietnam in the late 1990s. However, for simplicity of exposition, this paper assumes that all 10 countries were members of ASEAN throughout the analysis.
39. Korea EXIM Bank, Haewejikjuptooja, 2004.
40. Jee, Hankookeu Jung-guke Daehan.