A Study On Trade Effects Of South Korean Companies' Foreign Direct Investment

The purpose of this study was to analyze potential effects of South Korean companies' foreign direct investment(FDI) upon export and import of South Korea to and from target countries of investment.In order to achieve the above purpose,this study sought to theoretically explain potential effects of FDI on export and import of South Korea and examined previous academic literatures to analyze potential effects of FDI on export and import of South Korea.Next,this study suggested its characteristics and original implications,addressed actual conditions of FDI and export/import in South Korea,and examined potential associations between FDI and export/import.Then,it focused on designing are search model with survey data,so that it could make a further empirical analysis about potential effects of South Korea's FDI upon export and import of South Korea to and from target countries of investment.It was generally found that the FDI of South Korean companies had significantly positive(+) correlations with their export to target countries,that is,the higher volume of FDI was associated with the higher volume of export to target countries of investment.This finding implies actual effects of FDI on creating more incentives for export.And according to analysis about potential effects of FDI on import from all target countries of investment,it was found that the stock of FDI had significant positive(+) correlations with import.According to analysis on potential effectiveness of FDI in regional export and import,It was found that FDI had significantly positive(+) correlations with export of South Korea to Asia-Pacific region,and FDI of last two years was significantly correlated with import of South Korea from Asia-Pacific region.FDI had significantly positive(+) effects on import of South Korea from European region,but was not significantly correlated with export to this region on statistical basis.The higher volume of FDI was positively correlated with the higher volume of export from South Korea to American region,but only the stock of FDI in last year was significantly correlated with import to this region.Therefore,it is found that FDI targeting Asia-Pacific region has significant effects on export and impor to fSouth Korea to and from this region.According to comparison about potential effects of FDI on export and import depending on national economic growth of target countries(i.e.OECD members vs.non-OECD members),it was found that FDI was not significantly correlated with export to OECD members(i.e.advanced countries),but had significantly positive(+) correlations with import from those countries.In addition,it was found that FDI was positively correlated with export to non-OECD members(i.e.developing countries),but was not significantly correlated with import from those countries.This finding suggests that the higher volume of FDI targeting OECD members leads to the higher volume of import from them,where as the higher volume of FDI targeting non-OECD members leads to the higher volume of export to them.According to analysis about potential interactions between FDI and export/import by business type,it was found that the FDI of manufacturing industry was positively(+) correlated with both export and import.However,the FDI of service industry was not significantly correlated with either export or import,because the FDI of service industry ? contrary to manufacturing industry ? is mostly characterized by its tendency of orientation to local market.According to analysis on potential interactions between FDI and export/import by business type,it was found that the FDI of large enterprise was not significantly correlated with export and import,and that of small-or medium-sized private enterprise had significantly positive(+) effects on export,but import was negatively(-) correlated with FDI outflow of the latter enterprise in the year before last year.