Study On The Financial Development,Foreign Direct Investment And Economic Growth In South Korea

Economic growth is one of the most important fundamentals regarding the advancement of an economic society.Thus,each nation desire the realization of consistent,balanced,and well-arranged successful economic growth.This is the ultimate goal toward which modern economies are pursuing incessantly.As the velocity of economic process involved in financial institutionalization,financial growth and FDI have taken the essence in a national economy,which led to the fact that economic growth has become the permanent theme of economic researches.Despite the fact that there a number of factors affecting national economic growth such as the resource endowment,technology and knowledge level,the accumulation of capital,and the institutional environment,financial growth and FDI still occupies the essence in a national economy.The economic development in Korea is a typical example of how financial development and FDI promoted the economic growth.In the process of the route of Korean economic growth,financial growth and FDI on economic growth are encountered by frequent changes.In the over 22 years economic growth,Korean economy went through drastic expansion and recession twice.From this point,the research topic worth delving into arise,that is,how is that financial growth and FDI are closely correlated with economic growth in some cases while two sides are moving separately in other cases.Recently,the restructuring of Korean financial system are acquiring the substantial outcome of the continuous development in the financial market.The FDI inflow policy which could not attract attention gradually has become one of the national core strategies.Statistics show that as FDI inflow amount grows successively,so the deposit and loanable fund in the financial institutions increase.The relationship between the economic growth and FDI,the way in which the economic growth and FDI impact economic growth have become important topics in the economic research.Consequently,this paper is on the theoretical research and the empirical analysis specifically on how the financial growth and FDI are related to the economic growth.This paper probe into the main impetus of promoting Korean economic growth through the empirical analysis on the impact of economic growth and FDI on the economic growth.First of all,the perspective of Korean financial development influencing economic growth.The analysis is centered around the impact on the economic growth from "the quantitive development' perspective and 'qualitative development' perspective of the Korean finance.The analysis revealed there was great contribution of banks to the economic growth at the first phase of Korean economic development.Nonetheless,accompanied by economic development,especially after 1997 exchange crisis,there were substantial changes in the Korean financial system.Through this empirical analysis,it can be derived that along with the continuous development of banking sectors,that is,the Korean financial intermediaries,financial market including stock and bond sectors also developed rapidly.Secondly,the impact of Korean FDI on the economic growth perspective.Besides,‘FDI inducing factors' perspective and 'the impact of FDI development on the economic growth' perspective.The analysis shows that there are positive main determination factors of FDI attraction such as the employment of college graduates,the number of internet users,and the deregulation of FDI policies.At the same time,Korean Gross Fixed Capital,export,and total labor force plays essential role in promoting economic growth.