Intra-industry foreign direct investment and intra-industry trade in Korea

Abstract

This paper examines the relationship between international trade and foreign direct investment (FDI). In particular, it explores the impact of FDI on the pattern of trade in Korea during the 1990s. There were relatively rapid increases in outward and inward FDI flows; however, for manufacturing industries, the overall relationship between intra-industry trade and intra-industry FDI seems to be weak, though mainly positive. This finding suggests that globalisation of the Korean economy has so far resulted from intra-industry trade rather than international production through FDI. Show more