This study investigates the underlying factors that cause sluggish foreign direct investment and explores ways to respond to them. In Korea, the growth of foreign direct investment hasn’t been as rapid as in competing countries. This slump is attributed to high production costs, the difficulty of obtaining financing and purchasing land, insufficient social overhead capital and administrative regulations on foreign investment. It is true that the unconditional boosting of foreign direct investment can waste resources and weaken growth potential. Therefore, we need to encourage foreign direct investment in a way that meets the needs of the Korean economy.
The country’s FDI policy should move towards the abolishment or relaxation of different regulations and incentives, the improvement of national competitiveness and technological capabilities, the pursuit of efficient and diverse investment incentives and the alignment of domestic investment regulations with international ones. In order for these FDI-boosting measures to have a considerable effect, the existing administrative procedures need to be streamlined and transparency in the content and enforcement of the measures should be ensured to prevent the government’s executing bodies from arbitrarily interpreting the measures. In addition, incentives for foreign direct investment accompanied by advanced technology should be reformed so that they can lead to a positive external effect. To this end, various systems and institutions need to be adopted, including ones aimed at increasing investment efficiency.
외국인 직접투자의 부진과 대응방안(Sluggish foreign direct investment and solutions)
|Series Title; No||정책포럼 / 제106호(9609)|
|Subject||Economy < General|
|Holding||KDI; KDI School|