Transcript Rabin Hattari

Comments on
Korea's Outward FDI in
Asia: Characteristics and
Prospects
Rabin Hattari
General Trend
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Asia (in particular, Southeast Asia) received
more Korea’s FDI compared to other region.
Most of the investment has been on
manufacturing.
Large enterprises led continuously Korea’s FDI
outflow in most of the industries. SMEs and
individuals come second and third, respectively.
General comments
Paper explains the push and pull factors of Korea’s
outward FDI to world and to other Asian countries.
This is the same with push and pull factors with other
Asian countries.
Findings are aligned with empirical studies:
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Korea’s direct investment motives in Asia are different
between countries.
Appreciation of Korean won led to more outward FDI.
Low cost have been the dominant factors, although
increasing purchasing power of Asian economies are
beginning to take front stage.
General comments (cont’d.)
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Authors provided good introduction on Korea
pull and push factors.
Comments (cont’d.)
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However, the authors can strengthen the paper by:
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Simple analytical work to support the empirical observation
(gravity model) – an empirical study was conducted by Lee
(2005), where market size of the destination country and
real GDP per capita of the destination country are
determinants.
Elaborate more on labor issues in Korea. It would be useful
for readers to cite how often do labor disputes or labor
strikes happen in Korea compared to their destination
countries; and, how is Korea’s ULC compared to their
destination countries (in particular to China and Southeast
Asia).
Comments (cont’d.)
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What are their entry modes? Greenfield or M&As?
Case study between SMEs and large Korean
MNCs motives to invest in Asia will provide a
better insight.
Firm level data analysis will be a good next step in
analysing SMEs and large Korean MNCs motives.
Destination (cont’d.)
However, on per project basis, Singapore
leads Korea’s outward FDI.