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Impact of FDI on competition in Korean manufacturing industries : 1991-97

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  • Impact of FDI on competition in Korean manufacturing industries
  • Yun, Mikyung
  • Korea Institute for International Economic Policy


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Title Impact of FDI on competition in Korean manufacturing industries
Similar Titles
Sub Title

1991-97

Material Type Articles
Author(English)

Yun, Mikyung

Publisher

[Seoul]:Korea Institute for International Economic Policy

Date 2001
Journal Title; Vol./Issue Journal of East Asian Economic Integration:no. 2
Pages 30
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Direct Investment
Industry and Technology < Manufacturing
Holding KIEP

Abstract

Since the outburst of the financial crisis, FDI flows into Korea have dramatically increased, causing great concern regarding the rapid penetration of FDI and its concentrating effects on the economy. The study explores the issue of how FDI impacts on market structure and competition in Korea. The preliminary conclusions are that FDI seems to have an upward influence on concentration while at the same time, concentration leads to higher price cost margin, and through this channel, FDI would indirectly contribute to increasing price cost margin. The direct impact of FDI on price cost margin is not conclusive, but seems to suggest that multinationals are attracted to markets where profits are stable (and probably high), but compete profit away as they enter these markets.