Jung Soo Seo

Does FDI inflow crowd out domestic investment in Korea

This paper provides empirical evidence on the dynamic relationship between inward foreign direct investment (FDI), economic growth and domestic investment in Korea for the period 1985‐1999. By employing a vector autoregression model and the innovations accounting techniques, we explore dynamic interactions between inward FDI, domestic investment and output. We find that FDI has some positive effects on economic growth, but its effects seem to be insignificant. On the other hand, economic growth is found to have statistically significant and highly persistent effects on the future level of FDI. Although FDI is exogenous contemporaneously, we find that FDI shows strong dynamic endogeneity to domestic macroeconomic conditions, which has not been uncovered in previous works. Our finding does not support the view that FDI crowds out domestic investment in Korea.

An Analysis of Home Country Trade Effects of Outward Foreign Direct Investment: The Korean Experience with ASEAN, 1987-2002

A debate surrounds the trade impact of outward foreign direct investment (FDI), notably as to whether outward FDI complements or substitutes for a home countrys exports. This paper uses a fixed effect panel data econometric model to investigate the experience of Korean outward FDI in the ASEAN-4, during the 1987–2002 period. The results show that FDI stocks in ASEAN do not have discernable trade substituting effects on either Koreas exports or imports. However, it is found that contemporaneous FDI flows marginally contribute to Koreas exports to the region.

The Role of Port Size and Incentives in the Choice of Location by Port Users: A Game-Theoretic Approach

Abstract Fierce inter-port competition requires to strategically consider the roles port size and incentives play in a port users port selection. This paper contributes to literature by developing a simple game-theoretic model to address this particular issue. We demonstrate that once port is selected the port size and the administered incentive level positively influences the level of port users production; that the ports marginal cost incentive rate can change the firms location given the relative size of the ports; the changes in the incentive level set at one port should be more than the inversed relative port size to the other port.

Retrospect on the Development of the Shipping Industry in Korea, 1910–1950

Abstract Three wide-spread opinions were set in as orthodox in the Koreas shipping society as for the development of Koreas shipping industry. Firstly, the ocean-going shipping industry of Korea started from the scratch. Secondly, Korea took the reversed step compared with the pattern in advanced countries in that higher maritime educational institutions were established prior to acquiring vessels. Thirdly, the shipping industry of Korea has been led by marine officers. All of these opinions were based on the viewpoint that the Japanese colonial government on the Korean Peninsula was not for the Korean people while most of the modern systems of law, education and transportation, including shipping, were introduced to the Korean Peninsula by Japan. During the colonial period, the Japanese colonial government established Chosun Yusen Company in 1912 and the Merchant Marine College in 1919, implicating that Korean people could merely rebuild their own shipping industry with the remaining physical capital (vessels) and the human capital (seafarers) after the Japanese colonial governments expulsion in 1945. In this paper, we challenge such orthodox viewpoints by carefully reconstructing the historical facts on the Korean shipping, especially on the origin of the modern shipping industry in Korea from 1910 to 1950.

The Interdependence of Trade and Foreign Direct Investment in China During the 1990s

This chapter focuses upon international trade and foreign direct investment (FDI), which have been the engines of growth for China since the adoption of its ‘open door’ policy in the late 1970s. With rapid growth of trade during the 1990s China has experienced surpluses in its trade balance, which are structural in nature and primarily accounted for by the coastal provinces. The country has also emerged as a major recipient of global FDI flows. It is argued that both of these are related and should be considered in the context of business strategy adopted by foreign multinational enterprises (MNEs). An analytical framework is provided to show the nature and extent of interdependence between trade and FDI in China.

Trends in the Pattern of Foreign Direct Investment: the Case ofthe Asia-Pacific Region

This authoritative Handbook provides a thorough account and analysis of the important issues relating to the globalization of the international economy.