The Foreign Direct Investment in South Korea
The Foreign Direct Investment in South Korea
South Korea, one of four Asian tigers is a center of economic activity, culture, and art. Today, most of the multinational companies prefer to invest in this Asian nation not only because it is a democratic nation, but also it is favorable to FDI, and with fewer barriers. Therefore, in this assignment I am going to discover how South Korea is favorable to FDI by analyzing several factors, including its economic system, projected size of the national market, the nature of the economy, and as well as its culture. First of all, economic system is one of the factors that determine South Korea is favorable to FDI. Economic system is an organized system in which a nation allocates its resources and apportions goods and services in the national society. Generally, there are three main economic systems, including market economy, mixed economy, and command economy. Since South Korea is a developed democratic country, it has a market economic system. According to Wikipedia, “South Korea has a market economy which ranks 15th in the world by nominal GDP, identifying it as one of the G-20 major economies.” Additionally, under its market economy, the Korean government has also tried to attract FDI to Korea. “Passage of the Foreign Investment Promotion Act in 1998 greatly facilitated these efforts. The Act opened up 99.8 percent of Korea 's industries to foreign investment and provided significant protection for investors ' interests. Under the Act, foreign investors also receive incentives including tax breaks, cash grants and affordable land (Korea. Net).”
Secondly, since multinational companies want to generate benefits from a large amount of population, the projected size of national market is also a factor that affects FDI. According to Country Watch, “The population of South Korea is around 49 million, [and] three-fourths of them live in cities that are populated by a larger percentage of young people. The overall
South Korea, one of four Asian tigers is a center of economic activity, culture, and art. Today, most of the multinational companies prefer to invest in this Asian nation not only because it is a democratic nation, but also it is favorable to FDI, and with fewer barriers. Therefore, in this assignment I am going to discover how South Korea is favorable to FDI by analyzing several factors, including its economic system, projected size of the national market, the nature of the economy, and as well as its culture. First of all, economic system is one of the factors that determine South Korea is favorable to FDI. Economic system is an organized system in which a nation allocates its resources and apportions goods and services in the national society. Generally, there are three main economic systems, including market economy, mixed economy, and command economy. Since South Korea is a developed democratic country, it has a market economic system. According to Wikipedia, “South Korea has a market economy which ranks 15th in the world by nominal GDP, identifying it as one of the G-20 major economies.” Additionally, under its market economy, the Korean government has also tried to attract FDI to Korea. “Passage of the Foreign Investment Promotion Act in 1998 greatly facilitated these efforts. The Act opened up 99.8 percent of Korea 's industries to foreign investment and provided significant protection for investors ' interests. Under the Act, foreign investors also receive incentives including tax breaks, cash grants and affordable land (Korea. Net).”
Secondly, since multinational companies want to generate benefits from a large amount of population, the projected size of national market is also a factor that affects FDI. According to Country Watch, “The population of South Korea is around 49 million, [and] three-fourths of them live in cities that are populated by a larger percentage of young people. The overall
Cited: CountryWatch. CountryWatch, Inc, n.d. Web. 17 Nov. 2013. . "Economy of South Korea." Wikipedia. Wikimedia Foundation, 14 Nov. 2013. Web. 17 Nov. 2013. . "Foreign Direct Investment (FDI)." Foreign Direct Investment (FDI). KOREA.net, n.d. Web. 17 Nov. 2013. . "Korea, South Infrastructure, Power, and Communications, Information about Infrastructure, Power, and Communications in Korea, South." Encyclopedia of the Nations. Advameg, Inc., n.d. Web. 17 Nov. 2013. . Sorensen, Clark W. "Success and Education in South Korea." Comparative Education Review 38.1 (1994): 10-35. University of Washington. Web. 17 Nov. 2013. .