| ID | 074218 |
| Title Proper | Killing five birds with one stone |
| Other Title Information | inward foreign direct investment in post-crisis Korea |
| Language | ENG |
| Author | Cherry, Judith |
| Publication | 2006. |
| Summary / Abstract (Note) | This paper analyzes Korean attitudes towards inward foreign direct investment (IFDI) before and after the 1997 financial crisis, within the context of the debate on the costs and benefits of IFDI and intensifying global competition to attract inward investment. The Korean experience sheds light on the forces driving the liberalization and deregulation of inward investment by countries that had previously restricted and controlled IFDI and on the problems inherent in implementing these policy changes. For more than three decades, the South Korean government maintained a negative or passive attitude towards inward investment, which, despite its potential economic benefits, was seen as a less desirable option than using foreign loans to finance economic development. However, the 1997 crisis brought about a fundamental change in the Korean government's attitude, and led to sweeping policy changes that resulted in an investment boom in the immediate post-crisis period. After this initial success, the subsequent decline in FDI inflows prompted further measures to attract high-quality foreign investment. As the Korean government has discovered, while legal frameworks, promotional systems and structures can be reformed with relative ease, the issue of changing investors' perceptions of Korea and the Koreans' views of the role and value of inward investment is more problematic. Failure to resolve these problems and to develop strong locational advantages will put Korea at risk of losing crucial investments to regional competitors and will undermine efforts to enhance the global competitiveness of Korean firms and to promote sustainable economic growth and development in the years ahead. |
| `In' analytical Note | Pacific Affairs Vol. 79, No. 1; Spring 2006: p9-27 |
| Journal Source | Pacific Affairs Vol: 79 No 1 |
| Key Words | Korea ; Foreign Direct Investment ; Financial Crisis, 1997 ; Economic Development |