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Foreign Direct Investment Flows from China to Korea in the Automobile Industry

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  • Ka-Hyun Lee
  • Jai S. Mah

Abstract

This article addresses the effect of foreign direct investment (FDI) flows from China to Korea, particularly in the case of the automobile industry. Despite the various positive effects that FDI brings to the growth of the automobile industry, concerns and doubts have been cast upon China’s overseas investment in Korea’s automobile industry, as FDI may involve the transfer of technology, and thereby, China may soon catch up with Korea technologically. The Shanghai Automotive Industrial Corporation’s (SAIC) acquisition of one of the automobile producers of Korea, Ssangyong Motor Corporation, and the consequent technology transfer or leakage have become a controversial national issue in Korea. This article draws the policy implications from the case of the former corporation’s acquisition of the latter in light of the economic development and industrialisation of developing countries in general.

Suggested Citation

  • Ka-Hyun Lee & Jai S. Mah, 2017. "Foreign Direct Investment Flows from China to Korea in the Automobile Industry," China Report, , vol. 53(1), pages 26-45, February.
    • Handle: RePEc:sae:chnrpt:v:53:y:2017:i:1:p:26-45
    DOI: 10.1177/0009445516677362
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    References listed on IDEAS

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    1. Françoise Nicolas & Stephen Thomsen & Mi-Hyun Bang, 2013. "Lessons from Investment Policy Reform in Korea," OECD Working Papers on International Investment 2013/2, OECD Publishing.
    2. Michael Enowbi Batuo & Simplice A. Asongu, 2015. "The impact of liberalisation policies on income inequality in African countries," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 42(1), pages 68-100, January.
    3. Jai Sheen Mah, 2010. "Foreign Direct Investment Inflows and Economic Growth: The Case of Korea," Review of Development Economics, Wiley Blackwell, vol. 14(4), pages 726-735, November.
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