The Study On The Relationship Between ROK Outward FDI And Foreign Trade

In the context of economic globalization,international trade and investment liberalization provide the basis for the development of international markets for countries to develop their own economies.International trade and overseas investment,as well as the relationship between the two countries,have become the focus of financial and academic circles.Based on the theory of international trade and international investment,this paper systematically analyzes the development law of overseas direct investment and foreign trade in Korea,and uses the gravitational model to study the impact of overseas direct investment(FDI)on its import and export trade,And the influence of Korea’s import and export trade on overseas direct investment,and use the Granger causality test method to further analyze the relationship between Korea’s overseas direct investment and foreign trade.South Korea’s overseas direct investment has experienced four stages: primary development,rapid development,high speed development and coordinated development.The overall development shows a rapid growth trend in the fluctuation,the average growth rate is higher than the foreign trade,showing steady investment slowdown,the main investment enterprises to large enterprises,investment location decentralized,to invest in market development intentions,diversification of investment areas and so on.South Korea’s foreign trade development has undergone import substitution,export-oriented,technology,FTA,and so on four stages of evolution.Moreover,during these evolving periods,Korea’s foreign trade volume showed a strong growth momentum,with an average annual growth rate much higher than GDP growth.It can be seen that foreign trade is an important driving force for economic development in Korea.In the Korean foreign trade structure,mainly in industrial products,high-tech products and intermediate products,and these trade products in South Korea’s import and export trade in the leading role in the more obvious.In addition,the international trade of goods technology structure is optimized,heavy chemical industry has become the promotion of South Korea’s rapid economic development of a great help.Although South Korea has always been committed to diversified trade development,but relatively speaking,its in the United States,Japan and the Chinese market,import and export trade is still relatively concentrated.On the basis of clarifying the basic situation of overseas investment and foreign trade in South Korea,this paper uses the gravitational model and the Granger causality model to further study the relationship between overseas direct investment and trade in Korea.The results show that:First of all,the analysis of the gravitational model of the impact of overseas direct investment on foreign trade in Korea shows that both the import and the export and the outflow of overseas direct investment have a positive impact.But relatively speaking,the direct impact of overseas direct investment on exports is stronger than the impact on imports.South Korea’s import and export trade development will be actively driven by the flow of overseas direct investment,mainly because of the outflow of overseas direct investment in Korea with market-oriented and cost-oriented features.Second,the South Korean import and export trade on overseas direct investment gravitational model shows that South Korea’s exports significantly contributed to South Korea to export target countries additional overseas direct investment,reflecting the South Korean foreign direct investment is to occupy the host market.At the same time,South Korea’s imports of foreign direct investment also produced a role in promoting,but relatively speaking,the promotion of the role of much smaller than the export.It can be seen that the main purpose of overseas direct investment in Korea is also to a small place in the host market,resource development,the use of cheap labor motivation is relatively small.Finally,through the Granger causality test,it is concluded that the relationship between the export volume and the overseas direct investment in the short term is a two-way Granger causality relationship,and the two is a complementary two-way relationship.While the association between import trade and overseas direct investment is not obvious.It can be concluded that there is a long-term stable relationship between the export volume of Korean trade and overseas direct investment,and the import trade volume is associated with its long-term relationship,and the long-term complementary relationship between the former and the two is mainly due to the fact that South Korea expects to be able to invest overseas form in the host country market occupies a place,can use overseas cheap labor and resource development and other investment motive decision.