Journal of Korea Trade

Korea Trade Research Association (한국무역학회)
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Japan's Export Regulations and Korea's Investment Attraction Strategy: Focusing on the Parts and Materials Industry

  • Lee, Min-Jae (Department of International Trade, Mokwon University) ;
  • Jung, Jin-Sup (Department of International Business, Chungbuk National University) ;
  • Lee, Jeong-Eun (Department of Accounting, Dong-eui University)
  • Received : 2020.02.03
  • Accepted : 2020.05.20
  • Published : 2020.05.31
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Abstract

Purpose - In this paper, we provide recommendations for Korea's long-term direction and strategic measures to attract inward foreign direct investment (FDI) in response to Japan's export regulations. In doing so, we analyze the current situation and characteristics of trade between Korea and Japan, focusing on the parts and materials industry, which is particularly affected by Japan's trade regulations. Design/methodology - Based on the analysis of five successful inward FDI cases (e.g. Toray, IGK, Delkor, GlobalWafers, DuPont) and statistic trend review in the parts and materials industry, we consider various factors pertaining to successful inward FDI in Korea and propose valuable investment attraction strategies. Findings - For a successful investment attraction strategy, we studied some statistical trends in the internal and external environments of the parts and materials industry and successful investment attraction cases in Korea. We have found that in order to increase the probability of success in attracting investment, we need a mid-to long-term strategy considering multiple factors such as "Production-oriented, Demand-linked, Global Value Chain (VGC) linked, and Policy-linked investment attraction." Originality/value - We suggest several specific measures and important strategic implications for the Korean government and firm's managers to attract inward FDI successfully.

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