• Journal of the Economic Geographical Society of Korea
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• v.5 no.2
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• pp.249-275
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• 2002

Iksan Export Free Zone which was established for the export promotion, the employment augmentation, the technological improvement and the regional development promotion through the attraction of foreign direct investment is declining function with diminution of foreign direct investment, exportation and employment since the middle of the 1980s. The decline factor of the function was inherent in disregard of the necessary locational factors for Export Free zone's function promotion and without respect to conditions in a choice of location. And the present labor intensive industrial structure of region has some difficulties with a modification of Export Free Zone's industrial structure to a technology intensive industry. According to the lack of coherent policy, a limited plottage and a lack of the extensible space decrease the effect of agglomeration and economic of scale. And the lack of governmental policy to create a dynamic advantage comparative with an amelioration of the locational conditions of region diminish the regional attractive force to foreign direct investment.

• Management & Information Systems Review
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• v.1
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• pp.333-362
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• 1997

Since the profess of the reformation and opening Policy in 1978, China has been outstandingly developed its economy and increased the real scale of its economy 4 times as big as before, and is expected to rise as a superpower holding in check U.S.A even in economy as well as politics, military affairs and diplomacy in the 21st century. In this position, China has constantly tried to join WTO since 1986, as an effort to gain a status in the international society. It hsa been making various economic reformations to provoke a crustal movement in its own economy such as tariffs lowering measurement for the almost whole items, remove of restriction of import items, lowering the refunding rate of over deposit tax and annihilation of the special treatments for the foreign investment. In short, recently Chinese government is cutting down the special treatments for the foreign capital enterprises and changing the policy to the direction of gradually reinforcing the control, so it requires that our enterprises trying to advance and invest in China have to consider these carefully. Investment in China of our enterprises become serious since 1990 is focused on such labor intensive industries as textiles, sewing and shoes which lost the competitive power due to the wage increase. Particularly, Pusan economy having played the role of locomotive for Korean economy in the past developing period has been weakened in the competitiveness and not yet activated in 1990s. In terms of this, the enterprises engaged in such typical industries of Pusan as shoes, textiles and sewing have borne much fruit from the investment in China with abundant and cheap labors. However, from a few years the enterprises in Pusan invested in China due to the cheap labors and rich resources and invested in China have suffered much troubles and failures more and more resulted from the advancement without sufficient previous knowledge and information related to the investment including investment environment. Therefore, at the time of advancement in China, Korean enterprises should make their decision related to the investment, after taking these investment environment into account previously to a full extent and making an investment strategy.

• International Commerce and Information Review
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• v.13 no.2
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• pp.121-148
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• 2011

Korean small and medium sized firms are dramatically expanding during the past two decades. Since small and medium sized firms begun to invest overseas to cope with the external and internal business environment. the influencing factors should defined for the successful foreign investment. This paper presents the research model explaining successful knowledge transfer between Korean small and medium sized firms and partners for foreign investment. This model examines investing companies' organizational characteristics, partners' learning capability and relational characteristics between two partners. Detail variables include the learning culture and codifiability of investing companies, and absorptive capability of partners, and communication and trust as a relational factors between investing companies and partners. The result of empirical analysis of sample companies shows that knowledge culture and codifiability of investing companies, and communication from the relational factors are important for knowledge transfer. These results provide some implications for the successful foreign investment of small and medium sized firms. Firstly the investing company should develop its own learning culture and internal procedure for the successful foreign investment. And frequent communication channel is necessary for knowledge transfer and the trustful relationship between investors and partner.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.38
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• pp.377-408
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• 2008

Globalization of R&D activities of multinational firms is becoming important in compared with the past, because of increasing globalization of world economy. So, every country tries to attract foreign investment including R&D activities. In this paper, effects of several factors, which determine the scale of foreign subsidiary's R&D activities in local market, are analyzed. Through the review of previous literature, I found that three groups of determinant factors. The first one is the factor which is related to characteristics of local market, such as competitive situation of local market, accessability to research institutions, etc. The second group is the factor which is related to relationship between foreign subsidiary and its mother company. The dominant factors of this group are operation strategy of foreign subsidiary, competitiveness of mother firm, and equity structure of foreign subsidiary. Finally the characteristics of industry affect to the scale of foreign subsidiary's R&D activities. Among these factors, 6 factors are chosen to investigate empirically. For the empirical investigation, 107 foreign subsidiaries among KOITA(Korea Industrial Technology Association)'s list are chosen. Each subsidiary has more than 50% of foreign equity and implement R&D activities in Korea. The results show that sales volume of foreign subsidiary is dominant influencing factor in determining scale of R&D activities in Korean market. And also I found that currently established firms are implementing more R&D activities than old established firms. This is quite interesting finding. However, R&D activities of foreign subsidiary are not vitalized in Korean market. It probably means that Korean government and Korean business partners have to make effort to enhance foreign firms/ R&D activities, because it could contribute technological and economic development of Korean market.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.21 no.48
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• pp.133-144
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• 1998

International capital movement has made progress at global liberalization of finance and foreign exchange, international monetary norm changing into floating exchange rate system, easiness of collection of information and trade at improvement of information communication technology from early of 1970's. Results of empirical test for relation between foreign exchange rate or various determination factors of foreign exchange rate and interest rate are followed by next sentences. First, according to relation between foreign exchange rate and interest rate, correlation for each of variables after OECD entrance is increased. But, long-term & short-term interest rate is affected by Hanbo & Kia's bankruptcy, continuous large scale corporates bankruptcy and crisis of foreign exchange. Therefore, financial instability is occured. If portfolio investment fund has been inflow as it is mollified by continuous shortage of foreign exchange and fall of country's credit rating, it is expected to have positive effect for long-term & short-term interest rate from appreciation of won against dollar. Second, results from relation between determination factor of foreign exchange rate and interest rate are followed by next sentences. If surplus of current account and goods account is continued, yield of corporate bond is to be stable. But, margin of surplus is expected to diminish after second quarter 98, and difference between external and domestic interest (after adjusting foreign exchange rate) is to be diminished. And if net inflows of foreign investor's fund (stock and bond) is diminished, it is to have negative effect for yield of corporate bond. According to foreign investor's investment movement of previous years, hedge fund were stayed at least during two years in Mexico. It means that sudden capital outflow is not to be happened at Korea. But if external factors from depreciation of yen and China's renminbi are instable, interest rate is expected to increase from capital's outflows. Third, if it is to decrease instability of foreign exchange rate from increase in surplus of future current account, credit rating's upwardness, stability of yen and renminbi, foreign exchange rate is expected to be stable. It is expected to have continuous stability from short-term interest rate to long-term interest rate in this empirical test.

• Proceedings of the Safety Management and Science Conference
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• 2002.11a
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• pp.305-319
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• 2002

International capital movement has made progress at global liberalization of finance and foreign exchange, international monetary norm changing into floating exchange rate system, easiness of collection of information and trade at improvement of information communication technology from early of 1970's. Results of empirical test for relation between foreign exchange rate or various determination factors of foreign exchange rate and interest rate are followed by next sentences. First, according to relation between foreign exchange rate and interest rate, correlation for each of variables after OECD entrance is increased. But, long-term ＆short-term interest rate is affected by Hanbo ＆ Kia's bankruptcy, continuous large scale coporates bankruptcy and crisis of foreign exchange. Therefore, financial instability is occured. If portfolio investment fund has been inflow as it is mollified by continuous shortage of foreign exchange and fall of country's credit rating, it is expected to have positive effect for long-term & short-term interest rate from appreciation of won against dollar. Second, results from relation between determination factor of foreign exchange rate and interest rate are followed by next sentences. If surplus of current account and goods account is continued, yield of corporate bond is to be stable. But, margin of surplus is expected to diminish after second quarter 98, and difference between external and domestic interest (after adjusting foreign exchange rate) is to be diminished. And if net inflows of foreign investor's fund (stock and bond) is diminished, it is to have negative effect for yield of corporate bond. According to foreign investor's investment movement of previous years, hedge md were stayed at least during two years in Mexico. It means that sudden capital outflow is not to be happened at Korea. But if external factors from depreciation of yen and China's renminbi are instable, interest rate is expected to increase from capital's outflows. Third, if it is to decrease instability of foreign exchange rate from increase in surplus of future current account, credit rating's upwardness, stability of yen and renminbi, foreign exchange rate is expected to be stable. It is expected to have continuous stability from short-term interest rate to long-term interest rate in this empirical test.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.18
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• pp.159-188
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• 2002

International joint ventures are usually formed and managed by domestic companies and foreign investors for the common objectives. They offer an opportunity for each partner to benefit significantly from the comparative advantages of the other. Local partners bring knowledge of the domestic market; familiarity with government bureaucracies and regulations; understanding of local labor markets; and existing manufacturing facilities. Foreign partners can offer advanced process and product technologies, management know-how, and access to export markets. In Korea, joint ventures have been encouraged to usher in foreign investors with foreign currency capital badly needed during the IMF financial crisis. In the meantime, Korean laws and regulations with respect to joint ventures have been largely overhauled to promote foreign direct investment (FDI) both inbound and outbound. They include four types of FDI, i.e., acquisition of foreign stocks, provision of long-term loans, participation in joint operations like resources development, and establishment of foreign offices. From the legal point of view, the formal joint venture agreement must be an offspring of a series of tough negotiations between domestic and foreign partners. They usually stress the long-term relationship with the good will and dedication to each other, and restrict the free transfer of stocks. Both partners are earnestly interested in the ownership and management of the joint venture. So they keep a close eye on the articles of incorporation, changes of business environment, conflict resolution methods, transparency of accounting and other financial matters. When a multinational corporation (MNC) is involved in the joint venture, conflicts over management strategies, marketing and other issues take place more often than not between the MNC and local partners. We have to pay attention to joint ventures, particularly, in China and North Korea. As witnessed in other transition economies, China is eagerly bringing in foreign direct investments for the development of nation's economy. China encourages foreign investors to establish ordinary joint ventures, contractual joint ventures, solely invested foreign capital companies and jointly operated development companies with local partners. In North Korea, however, joint ventures have a different meaning like contractual joint ventures in China, in which North Korean partners have an initiative in the management. Rather, jointly operated companies or simply processing-for-wage companies are recommended in view of the unpredictable legal infrastructure in North Korea.

• Proceedings of the Safety Management and Science Conference
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• 2002.11a
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• pp.321-339
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• 2002

The result of variance decomposition through yield of Treasury of 30 year maturity of USA, S&P 500 index, stock price of KEPCO has 76.12% of impulse of KEPCO stock price at short-term horizon, but they have 51.40% at long-term horizon. After one year, they occupy 13.65%, and 33.25%. So their effects are increased. By the way, S&P 500 index and yield of Treasury of 30 year maturity of USA have relatively more effect for forecast of stock price oi KEPCO at short-term & long-term. The yield of Treasury of 30 year maturity of USA more than S&P 500 index have more effect for stock price of KEPCO. It is why. That foreign investors through fall of stock price of USA invest for emerging market is less than movement for emerging market of hedge funds through effect of fall of yield of Treasury of 30 year maturity of USA, according to relative effects for stock price of Korea companies. The result of variance decomposition through won/dollar foreign exchange rate, yield of corporate bond of 3 year maturity, Korea Stock Price index(KOSPI), stock price of KEPCO has 81.33% of impulse of KEPCO stock price at short-term horizon, but they have 41.73% at long-term horizon. After one year, they occupy 23.57% and 34.70%. So their effects are increased. By the way, KOSPI and won/dollar foreign exchange rate have relatively more effect for forecast of stock price of KEPCO at short-term & long-term. The won/dollar foreign exchange rate more than KOSPI have more effect for stock price of KEPCO. It is why. The recovery of economic condition through improvement of company revenue causes of rising of KOSPI. But, if persistence of low interest rate continues, fall of won/dollar foreign exchange rate will be more aggravated. And it will give positive effect for stock price of KEPCO. This gives more positive effect at two main reason. Firstly, through fall of won/dollar foreign exchange rate and rising of credit rating of Korea will be followed. Therefore, foreign investors will invest more funds to Korea. Secondly, inflow of foreign investment funds through profit of won/dollar foreign exchange rate and stock investment will be occurred. If appreciation of won against dollar is forecasted, foreign investors will buy won. Through this won, investors will do investment. Won/dollar foreign exchange rate is affected through external factors of yen/dollar foreign exchange rate, etc. Therefore, the exclusion of instable factors for foreign investors through rising of credit rating of Korea is necessary things.

• International Commerce and Information Review
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• v.11 no.4
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• pp.347-372
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• 2009

International investment has been gaining the importance in the economic growth, employment and technological spillover for many countries at the time of unrestrained flow of the production resources, inter alia, the capital. International investment is prerequisite for Korea to overcome its resource-scarcity. This paper studied some contentious issues of international investment and attempted to suggest negotiating position for Korea on future FTAs. We have made theoretical research of the issues and derived common denominators from four previous FTAs which Korea has concluded. Based on both theories and evidences, we suggest that Korea be ready to have more open attitude for incoming international investment, that is, foreign direct investment(FDI) in future FTA negotiations although Korea should have rather flexible strategy on international investment issues, on the basis of the reciprocity.

• KDI Journal of Economic Policy
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• v.44 no.3
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• pp.27-48
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• 2022

This paper reconsiders the empirical evidence of the relationship between tax treaties and FDI using U.S. outbound FDI to 78 countries over the period of 2007-2018. Unlike previous studies, we explicitly consider differences in the tax environments of recipient economies, including their tax-haven status, transfer pricing rules, CFC rules and anti-avoidance regulations, in our estimations. Our results confirm the importance of controlling for country-specific tax environments, especially the tax-haven status and transfer pricing rules. We find that tax treaties positively contribute to FDI inflows in developing countries, while they have no statistically significant impacts on OECD countries. Recently signed tax treaties still foster FDI but less than older ones do. Finally, our results indicate, all other things being equal, that the weaker the transfer pricing regulations, the greater the amount of U.S. direct investment into a non-OECD economy.