East Asia Foundation: FDI Outflow Surge From South Korea

Foreign direct investment outflows from South Korea are surging, increasing by more than 30 percent annually since 2010. Such levels can signal economic growth, but can also warn about rising wages, tax rates and regulations that erode a country’s manufacturing base and eliminate jobs, explains Namsuk Choi for East Asia Foundation. “The Moon Jae-in administration’s economic policies have had unintended consequences,” he writes. “The corporations and laborers that it targets to help are those who are getting hurt…. The business environment worsened as minimum wages increased and working hours shortened.” Large companies can respond quickly while small ones struggle. Protectionism and reshoring policies in the United States and Japan could encourage companies to return to South Korea, but the South Korean market is small. The writer urges South Korea to define targets and prepare policies to encourage cooperation among companies and protect jobs. Nations should diversify export markets, recruit talent and remain flexible on global demand. – YaleGlobal

East Asia Foundation: FDI Outflow Surge From South Korea

A minimum wage hike and other regulations drive FDI outflow from South Korea – and country should aim for policies to encourage jobs and flexibility
Namsuk Choi
Wednesday, April 11, 2018

Read the article from East Asia Foundation about FDI outflows from South Korea.

Namsuk Choi is an associate professor with the College of Commerce at Chonbuk National University. He received his PhD in economics from the University of Colorado at Boulder. He is a board member of the Korean Association of Trade and Industry Studies, committee member of the Journal of Korea Trade, and serves on the advisory committee of the Bank of Korea Chonbuk head office. His research interests include the theory of international trade, multinational corporations, and the global supply chain.

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