Comments onComments onKorea's Outward Korea's Outward

FDI in FDI in Asia: CharacteristicAsia: Characteristic

s and Prospects s and Prospects Rabin HattariRabin Hattari

General TrendGeneral Trend

Asia (in particular, Southeast Asia) Asia (in particular, Southeast Asia) received more Korea’s FDI received more Korea’s FDI compared to other region.compared to other region.

Most of the investment has been on Most of the investment has been on manufacturing.manufacturing.

Large enterprises led continuously Large enterprises led continuously Korea’s FDI outflow in most of the Korea’s FDI outflow in most of the industries. SMEs and individuals industries. SMEs and individuals come second and third, respectively.come second and third, respectively.

General commentsGeneral comments Paper Paper explains the push and pull factors of explains the push and pull factors of

Korea’s outward FDIKorea’s outward FDI to world and to other to world and to other Asian countries. This is the same with push Asian countries. This is the same with push and pull factors with other Asian countries.and pull factors with other Asian countries.

Findings are aligned with empirical studies:Findings are aligned with empirical studies:1.1. Korea’s direct investment motives in Asia are Korea’s direct investment motives in Asia are

different between countries.different between countries.2.2. Appreciation of Korean won led to more outward Appreciation of Korean won led to more outward

FDI.FDI.3.3. Low cost have been the dominant factors, Low cost have been the dominant factors,

although increasing purchasing power of Asian although increasing purchasing power of Asian economies are beginning to take front stage. economies are beginning to take front stage.

General comments General comments (cont’d.)(cont’d.)

Authors provided good introduction Authors provided good introduction on Korea pull and push factors.on Korea pull and push factors.

Comments (cont’d.)Comments (cont’d.) However, the authors can strengthen the However, the authors can strengthen the

paper by:paper by: Simple analytical work to support the empirical Simple analytical work to support the empirical

observation (gravity model) – an empirical study observation (gravity model) – an empirical study was conducted by Lee (2005), where market size was conducted by Lee (2005), where market size of the destination country and real GDP per capita of the destination country and real GDP per capita of the destination country are determinants.of the destination country are determinants.

Elaborate more on labor issues in Korea. It would Elaborate more on labor issues in Korea. It would be useful for readers to cite how often do labor be useful for readers to cite how often do labor disputes or labor strikes happen in Korea disputes or labor strikes happen in Korea compared to their destination countries; and, how compared to their destination countries; and, how is Korea’s ULC compared to their destination is Korea’s ULC compared to their destination countries (in particular to China and Southeast countries (in particular to China and Southeast Asia).Asia).

Comments (cont’d.)Comments (cont’d.)

What are their entry modes? What are their entry modes? Greenfield or M&As?Greenfield or M&As?

Case study between SMEs and large Case study between SMEs and large Korean MNCs motives to invest in Asia Korean MNCs motives to invest in Asia will provide a better insight.will provide a better insight.

Firm level data analysis will be a good Firm level data analysis will be a good next step in analysing SMEs and large next step in analysing SMEs and large Korean MNCs motives.Korean MNCs motives.

Destination (cont’d.)Destination (cont’d.)

However, on per project basis, However, on per project basis, Singapore leads Korea’s Singapore leads Korea’s outward FDI.outward FDI.