This study investigates the factors that affect South Korean outward foreign direct investment (FDI) in developing countries. Most previous studies focus on monadic factors and do not consider how and to what extent bilateral relationships between South Korea and the host countries affect the investment decisions of Korean firms. The current study finds that interstate factors such as South Korea's international investment treaties with and official development assistance to host countries have positive effects on FDI to these countries, while presidential visits have strong and statistically significant effects on FDI only in countries located in non-Asian regions, especially the African continent. The findings suggest that the effects of bilateral relations on South Korea's FDI vary depending on the geographic location of the host country.
Bibliographical noteFunding Information:
Investment decisions by private actors in developing countries can be made with careful consideration of capital transfer by public entities in their home countries to host countries. This is because official financial flows to host countries can encourage private actors who, on behalf of home countries, may be chosen to provide goods and services to host countries to make their own investment. In a more indirect way, economic development and better infrastructure funded by official financial support from home to host countries can provide better investment environments for private firms and business owners.
© 2020 John Wiley & Sons Ltd
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
- Political Science and International Relations