본문 바로가기 주메뉴 바로가기
kiep logo

Contents

Citation

Citation
No Title

Article View

East Asian Economic Review Vol. 3, No. 3, 1999. pp. 71-99.

DOI https://dx.doi.org/10.11644/KIEP.JEAI.1999.3.3.48

Number of citation : 0

View
515

Download
98

crossmark images crossmark images
PDF PPT Twitter Facebook

Overseas direct investment and exports in Korea: A time series approach

Author

Donghwa Shin

Creative Commons Attribution License

EAER is an open access journal distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license.

Abstract

Overseas direct investment is one of the most important and influencing variables in globalizing economy. And it continues to be a driving force of the globalization process that characterizes the modern world economy. Among others, export related effects are prominent. In this study, the relationship between overseas direct investment and exports is investigated using quarterly data and time series approach. Firstly, the stationarity of variables is examined using unit root test. And the adequacy of using VAR model is tested with co-integration test. Next, the relationship between overseas direct investment and exports is analyzed using Granger causality method. The reliability of Granger causality tests depends on the correct specification of the information universe because the omission of relevant in a third variable exists, which cause both overseas direct investment and export, the causality tests may be spurious, reflecting the influence of the omitted variable. To avoid this problem, exchange rate is included as an exogenous variable. Finally, impulse response analysis is performed to assess the quantitative impact of overseas direct investment on exports and vice versa.

JEL classification: F13, F21, F23,

Keywords

Foreign Direct Investment, Export policy, Korea, Vector Auto Regression Model

Language

Korean

References

  1. Agarwal, J.P. 1997. "European Integration and German FDI: Implications for Domestic Investment and Central European Economies," National Institute Economic Review, vol. 160, no. 1, April, pp. 100-111. CrossRef
  2. Agarwal, Jamuna Prasad, Gubitz, Andrea and Peter Nunnenkamp. 1991. Foreign direct investment in developing countries: the case of Germany. Tubingen: J.C.B. Mohr CrossRef
  3. Ahmad, Jaleel and Somchai Harnhirun. 1996. "Cointegration and Causality between Exports and Economic Growth: Evidence from the ASEAN Countries," The Canadian Journal of Economics, vol. 29, Special Issue Part 2, pp. S413-S416 (April). CrossRef
  4. Bae, Sung C. and Sungoh Hwang. 1997. "An empirical analysis of outward foreign direct investment of Korea and Japan," Multinational Business Review, vol. 5, issue. 2, pp. 71-80. St. Louis University
  5. Baldwin, Robert E. 1995. "The Effects of Trade and Foreign Direct Investment on Employment and Relative Wages," NBER Working Paper No. 5037, Issued in February 1995. CrossRef
  6. Baldwin, Robert E. eds. 1988. Trade Policy Issues and Empirical Analysis. University Of Chicago Press.
  7. Bank of Korea. 1997. The Current Status and Tasks of Foreign Direct Investment. (In Korean)
  8. Blomstrom, Magnus., Fors, Gunnar and Robert E. Lipsey. 1997. "Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden," NBER Working Paper No. 6205, Issued in October 1997. CrossRef
  9. Blomstrom, Magnus and Ari Kokko. 1994. "Home Country Effects of Foreign Direct Investment: Evidence from Sweden," NBER Working Paper No. 4639 (Also Reprint No. r1994), Issued in February 1994. CrossRef
  10. Blomstrom, Magnus and Ari Kokko. 1997. "Regional Integration and Foreign Direct Investment," NBER Working Paper No. 6019, Issued in April 1997. CrossRef
  11. Blomstrom, Magnus., Lip, Robert E. and Ksenia Kulchycky. 1988. "U.S. and Swedish Direct Investment and Exports." In Baldwin, R.E. ed. Trade Policy Issues and Empirical Analysis. University of Chicago Press. CrossRef
  12. Chen, Tain-Jy, Chen, Yi-ping and Yinghua Gu. 1995. "Taiwan's outward direct investment : has the domestic industry been hollowed out?," In The new wave of foreign direct investment in Asia (Compiled by Nomura Research Institute and Institute of Southeast Asian Studies), pp. 87-110. Ashgate Pub Co.
  13. Cooley, Thomas F. and Stephen F. Leroy. 1985. "A theoretical macroeconometrics: A critique," Journal of Monetary Economics, vol. 16, issue. 3, November, pp. 283-308. CrossRef
  14. Doyle, Eleanor. 1998. "Export-output causality: The Irish case 1953？93," Atlantic Economic Journal, vol. 26, issue. 2, June, pp. 147-161. CrossRef
  15. Graham, E.M. 1995. "Foreign Direct Investment in the World Economy," IMF Working Paper No. 95/59.
  16. Greenaway, David. 1993. "Trade and foreign direct investment," European Economy, vol. 52, pp. 103-128.
  17. Hamada, K. 1997. "The Effect of Foreign Direct Investment on the Pattern of Trade: Is Investment a Substitute for Trade?," Review of Asian and Pacific Studies, no. 14, pp. 1-17.
  18. Hufbauer, G., Lakdawalla, D. and A. Malani. 1994. "Determinant of Direct Foreign Investment and its Connection to Trade." In UN, UNCTAD Review 1994.
  19. Japanese Economic Planning Agency. 1990. Foreign Direct Investment Influencing Japan and the World. (In Japanese)
  20. Jeong, Hun. 1997. “A study on the Foreign Direct Investment of the Manufacturing Industries of the U.S. and Japan,”. Hitotsubashi University Ph. D. Thesis. (In Japanese)
  21. Kim, M. J. and K. H. Chang. 1998. Financial econometrics. Seoul: Kyungmoon Publishers. (In Korean)
  22. Kim, S. J. 1997. “A Study of the Determinants and the Effects of Foreign Direct Investment,” Korea Development Institute. (In Korean)
  23. Kim, S.-J. 1996. “Korean Oversea's Direct Investment: Trends and Implications,” Policy Analyses 96-03. Seoul: Korea Institute for International Economic Policy. (In Korean)
  24. Kim, W. T., Yu, J. S., Lee, H. and I. S. Hwang. 1997. “An Analysis on the Determinants, Effects, and Policies of Foreign Direct Investment,” Samsung Economic Research Institute. (In Korean)
  25. Kim, J.-D. 1994. “Exports and Foreign Direct Investment in the Globalization Era,” Policy Analyses 94-16. Seoul: Korea Institute for International Economic Policy. (In Korean)
  26. Kim, J.-D. and I.-S. Kang. 1995. “Effect of Tariff Reduction on Offshore-Processed Imports,” Policy Analyses 95-11. Seoul: Korea Institute for International Economic Policy. (In Korean)
  27. Ietto-Gillies, Grazia. 1992. International Production: Trends, Theories, Effects. Aspects of Political Economy Series. Polity Press.
  28. Linzondo, J. S. 1993. Foreign Direct Investment. In Aliber, R. Z. and R.W. Click. eds. Readings in International Business: A Decision Approach. The MIT Press; First Edition (May 20, 1993).
  29. Lipsey, Robert E. 1991. "Foreign Direct Investment in the U.S. and U.S. Trade," NBER Working Paper No. 3623 (Also Reprint No. r1667), Issued in February 1991 CrossRef
  30. Lipsey, Robert E. 1994. "Outward Direct Investment and the U.S. Economy," NBER Working Paper No. 4691 (Also Reprint No. r2020), Issued in March 1994. CrossRef
  31. Lipsey, Robert E. and Merle Yahr Weiss. 1981. "Foreign Production and Exports in Manufacturing Industries," The Review of Economics and Statistics, vol. 63, no. 4, November, pp. 488-494. CrossRef
  32. Lipsey, Robert E. and Merle Yahr Weiss. 1984. "Foreign Production and Exports of Individual Firms," The Review of Economics and Statistics, vol. 66, no. 2, May, pp. 304-08. CrossRef
  33. Luiz R. de Mello, Jr. 1999. "Foreign direct investment-led growth: evidence from time series and panel data," Oxford Economic Papers, vol. 51, issue. 1, pp. 133-151. CrossRef
  34. Madeuf, B. 1995. "Foreign Direct Investment, Trade and Employment: Delocalization," In OECD, Foreign Direct Investment, Trade and Employment.
  35. OECD. 1997. "HOW FOREIGN DIRECT INVESTMENT AFFECTS INTERNATIONAL TRADE AND COMPETITIVENESS - AN EMPIRICAL ASSESSMENT," OECD DSTI/EAS/IND/SWP(97)15.
  36. OECD. 1991. "The Interrelationship of Trade and Foreign Direct Investment." OECD OLIS TD/TC/WP(91)51.
  37. OECD. 1996. "The Links between Foreign Direct Investment and Trade: Empirical Evidence for US and French industries (1984-1994)”, OECD OLIS DSTI/EAS/IND/ WP9(96)5.
  38. Tsai, Pan-Long. 1994. "Determinants of Foreign Direct Investment and Its Impact on Economic Growth," Journal of Economic Development. vol. 19, no. 1, June, pp. 137-163. CrossRef
  39. Park, W. K. 1998. "Granger Causality between Government Revenues and Expenditures in Korea," Journal of Economic Development, vol. 23, no. 1, July, pp. 145-155. CrossRef
  40. Pfaffermayra, M. 1994. "Foreign direct investment and exports: a time series approach," Applied Economics, vol. 26, issue. 4, July, pp. 337-351. CrossRef
  41. Ryou, J. W. 1996. “Trade and Production Effects of Outward Direct Foreign Investment: A Case of Korea,” Kukje Kyungje Yongu, vol. 2, no. 2, pp. 133-160. Korea International Economic Association. (In Korean)
  42. UNCTAD. 1993. World Investment Report 1993: Transnational Corporations and Integrated International Production.
  43. UNCTAD. 1994. World Investment Report 1994: Transnational Corporations, Employment and the Workplace.
  44. UNCTAD. 1997. World Investment Report 1997: Transnational Corporations, Market Structure and Competition Policy.
  45. UNCTAD. 1998. World Investment Report 1998: Trends and Determinants.
  46. Won, Y.-K. 1996. “Trade and Investment Pattern and Policy Issues in the ASEAN-Korea Relationship,” Policy Analyses 96-10. Seoul: Korea Institute for International Economic Policy. (In Korean)
  47. Tanaka, T. 1995. International Trade and Foreign Direct Investment. Tokyo: Yuhikaku. (In Japanese)