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Korea's Foreign Direct Investment in Southeast Asia
The purpose of this paper is to present the major trends and characteristics of Korea's FDI in Southeast Asia and to assess its causes and consequences. Our study confirms that mutual benefits from FDI flows are prevalent. As for ..
Jai-Won Ryou et al. Date 1993.03.01
Overseas direct investmentDownloadContentContents
1. INTRODUCTION
2. OVERVIEW OF KOREA'S OUTWARD FOREIGN DIRECT INVESTMENT
A. Upsurge of Outward FDI
B. Active Investment in the Manufacturing Sector
C. Growing Investment in Southeast Asia
3. PRESENT STATUS OF KOREA'S FDI IN SOUTHEAST ASIA
A. Major Characteristics
B. Motivation and Performance
C. Economic Effects
4. ISSUES AND PROSPECTS FOR KOREA'S FDI IN SOUTHEAST ASIA
A. Capital Flows and the Balance of Payments
B. Outward FDI and De-industrialization
C. Globalization and Business Networking
5. SUMMARY AND CONCLUSIONS
〈References〉
Appendices
SummaryThe purpose of this paper is to present the major trends and characteristics of Korea's FDI in Southeast Asia and to assess its causes and consequences. Our study confirms that mutual benefits from FDI flows are prevalent. As for the Korean economy, the outward FDI in Southeast Asia contributes to industrial restructuring by promoting resource re-allocation from sectors losing their comparative advantage to those with promising growth opportunities. The host economy can expect that FDI inflows in industries with a comparative advantage will promote export and transfer of appropriate technologies for economic development.
This paper will first review major characteristics of recent trends in Korea's outward FDI. Secondly, it examines Korea's FDI in Southeast Asia with a focus on its present status, performance and economic effects. Thirdly, this paper then discusses prospects for Korea's investment in Southeast Asia.
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Tumen River Area Development Programme: Ideas and Prospects
This report takes an optimistic view regarding the prospects and possibility of Tumen River Area Development Programme (TRADP). Even though various views on the regional scope, way of cooperation and possibility of realization as ..
Hak Soo Kim Date 1993.03.01
Economic developmentDownloadContentSummaryThis report takes an optimistic view regarding the prospects and possibility of Tumen River Area Development Programme (TRADP). Even though various views on the regional scope, way of cooperation and possibility of realization as to the Northeast Asia economic cooperation still exist as discussable subjects, Tumen River development plans are established and proceeding by individual country such as RaJin SunBong Free Trade Area in North Korea, Hunchun development plan in China and Great Vladivostock Development Plan in Russia.
The participating countries of Tumen River Area Development Programme are divided by bordering countries such as North Korea, China, and Russia, plus non-bordering countries like South Korea and Mongolia. Among the bordering countries China is more dynamic in regional development compared to the other countries. South Korea as one of the non-bordering countries is most active in private investment in this area.
This report maintains that the Korean should prepare the new role and strategy for participation and United Nations Development Programme (UNDP) should prioritize its bankable project. -
Comparative Analysis of the Investment Environments in Central and Eastern European Countries
Jung-Jae Chung Date 1993.02.26
Overseas direct investment -
Research on the Taxation System of the Russian Federation
Yeo-Cheon Jeong Date 1993.02.26
Tax system -
Economic Status of Cuba and Cooperative Potential between Korea and Cuba
Tae-Hyun Ha Date 1993.02.26
Economic development, Economic cooperation -
Technology Trade of Japan
It is often said that many Asian countries have followed the Japanese model of industrial and technology policy. Among these Asian countries, Korea has been regarded as the most faithful follower of the Japanese model. This paper ..
Jin Soo Yoo Date 1993.02.01
Technical cooperationDownloadContentSummaryIt is often said that many Asian countries have followed the Japanese model of industrial and technology policy. Among these Asian countries, Korea has been regarded as the most faithful follower of the Japanese model.
This paper reviews Japan technology trade, focusing on the import and export of technology, a degree of dependence on advanced nations' technology, the balance of technology trade and their major channels and agents. It observes historical overview and main features of technology trade between Korea-Japan. The paper discusses the challenges ahead for Korea and makes some suggestions for Korea and other Asian developing countries. -
Reform of Chian's State Enteprises: Evaluation and Prospects
A process of reform of China's economic system has differed from those of other socialist states. The systemic conversion of the former-Soviet Union or East Europe countries aimed at the privatization of enterprises and changing t..
Si-Joong Kim Date 1993.02.01
Economic reformDownloadContentSummaryA process of reform of China's economic system has differed from those of other socialist states. The systemic conversion of the former-Soviet Union or East Europe countries aimed at the privatization of enterprises and changing the pricing system and resource distribution, raising debates over scope and speed.
China aimed at establishing its distinctive and planned socialism and combining the planned socialism with the market economy, allowing private ownership on the basis of public ownership of the means of production, with distribution according to property on the basis of labor.
Thus, a process of Chinese concrete reform is on the premise that fundamental factor of socialism should be preserved.
This report identifies the characteristic and development of reform of China's state enterprises by evaluating its reform and by suggesting perspectives for that reform. -
Two years since German Unification
The Korea Institute for International Economic Policy (KIEP) co-hosted the international seminar with the Friedrich Ebert Stiftung (FES) on 'Two Year Since the German Unification: Economic Evaluation and Implications for Korea', o..
Jin Young Bae Date 1993.02.01
DownloadContentSummaryThe Korea Institute for International Economic Policy (KIEP) co-hosted the international seminar with the Friedrich Ebert Stiftung (FES) on 'Two Year Since the German Unification: Economic Evaluation and Implications for Korea', on October 1-2, 1992.
German unification has provided Korea with a number of important implications. Studies on Germany's unification are of greater importance. German unification suggests the possibility of a united Korea. However, the two-year experience of unified Germany also suggests that the unification process can be accompanied by severe suffering and anguish, more than ever expected. The aftermath of Germany's unification demonstrates a difficulty associated with the combining of two different nations with different political, economic and social system.Consequently, from the lessons learned from the German experience, it has now become apparent that South Korea should immediately expend its efforts to gather the wisdom and energy of its people. -
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Economic Effects of Import Source Diversification Policy (ISDP)
Import source diversification policy(ISDP) presupposes that foreign trade deficit vis-a-vis one nation is undesirable and its purpose lies in maintaining the balance of trade with each country. The background for this policy can b..
In-Soo Kang Date 1993.01.01
Trade policy, Free tradeDownloadContentContents
I. FORWARD
1. Issues
2. Outline of import source diversification policy
(1) Purpose of ISDP and designation of products to be covered
(2) Actual status
3. Japan's response
II. AN ANALYSIS OF ISDP'S OVERALL EFFECTS
1. Expected effects of ISDP
(1) Positive effects
(2) Negative effects
2. Analysis of actual evidence
(1) Import source diversification effects
(2) Competitiveness enhancing effects
III. ANALYSIS OF THE DYNAMIC EFFECTS OF ISDP
1. Regression analysis and correlation coefficient analysis
(1) Import source diversification effects and competitiveness enhancing effects
(2) Correlation coefficient analysis
2. Effects of ISDP designation
3. Effects of liberalization (exclusion from ISDP)
4. Evaluation and implications
IV. A COMPREHENSIVE EVALUATION AND PROGRAM FOR IMPROVEMENT
1. Comprehensive evaluation
(1) Overall effects and problems
(2) Policy implications
2. Problems and improvement measures associated with the execution of ISDP
(1) Problems with the execution of ISDP
(2) Plans for improving ISDP
3. Tentative plan for prior announcement of ISDP
〈Reference〉
Appendix
SummaryImport source diversification policy(ISDP) presupposes that foreign trade deficit vis-a-vis one nation is undesirable and its purpose lies in maintaining the balance of trade with each country. The background for this policy can be found in a search for ways to cushion the impact stemming from import liberalization, which began in 1978 and furthermore, to protect and foment domestic industry.
In the meanwhile import source diversification policy(ISDP) has had some merits in terms of controlling the trade deficit vis-a-vis Japan and fomenting domestic capital goods industry.
But on the other hand, there have been criticism about the negative side-effects of ISDP. First of all, for the most part, no consistent principles have been established on the types of products which are to be included or excluded from the policy. Thus, some suspect whether ISDP has only succeeded in protecting industry interests while creating many inefficiencies by restricting competition. In particular, since the end of 1980s when the export competitiveness of Korean products has dropped sharply, many people question the efficiency of ISDP.
Further, with respect to the outside world, ISDP violates GATT Principles. As such, ISDP not only produces a negative image concerning Korea's desire for free trade but is also likely to lead to demands for revision. And, in the context of Korea-Japan trade negotiations, Japan can be expected to use Korea's ISDP as a pretext to defend its protectionist policies and practices. Therefore, Korea must formalize its response to such actions by Japan.
In this connection, this study proposes to set forth plans for enhancing ISDP in the future on the basis of a critique of the economic efficiency of the said policy. Specifically, the focus of this study will center on the following questions.
First, what is the actual contribution of ISDP to the import source diversification of designated products and protection of domestic industry?
Second, with respect to major ISDP-designated products, what is their degree of import dependence on Japan and competitiveness status and, problems which can be expected to arise in the event of ISDP's cancellation?
Third, what are clear criteria for inclusion and exclusion within ISDP in order to enhance ISDP?
To answer the above questions, this paper has been structured as follows. The remainder of Part I deals with the purpose and actual status of ISDP, along with Japan's response to it. Part Ⅱ reviews and compares the conversion of import sources and import substitution effects for all products covered by ISDP. Furthermore, for the period 1988 - 1990, changes in import unit prices and export unit prices are examined. PartⅢ, which concentrates on 105 items for which consistent data are available, analyzes the dynamic changes in import and export during ISDP designation and cancellation. In particular, on the basis of the cancellation experience of some items, policy principles of ISDP designation and cancellation are derived. Part Ⅳ summarizes the principal results and offers directions for improvements in the enforcement of the policy in the future.
Finally, with regard to the actual evidece presented in the study, I must point out that the difficulties involved in obtaining consistent data created serious limitations. First of all, the classification of trade data was converted from CCCN(Customs Cooperation Council Nomenclature) to HS(Harmonized Commodity Description and Coding System) in 1988. Also, as the reader might know, the method of classification differs for trade statistics and industry statistics (KSIC: Korean Standard Industrial Classification), limiting the feasibility of a systematic analysis of production and trade effects. Therefore, a direct investigation of the effects of ISDP not only on the relevant products but the entire economy left much to be desired. The issue of general efficiency of ISDP remains a research topic for future.
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