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1 Aggregate and heterogeneous sectoral growth effects of foreign direct investment in Egypt  / 2020 /  Review of Development Economics  / vol.24, no.4, pp.1511 / 

10.1111/rode.12698
2 Does Inward Foreign Direct Investment Affect Productivity across Industries in Korea?  / 2021 /  East Asian Economic Review  / vol.25, no.2, pp.151 / 

10.11644/KIEP.EAER.2021.25.2.394

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East Asian Economic Review Vol. 14, No. 2, 2010. pp. 21-46.

DOI https://dx.doi.org/10.11644/KIEP.JEAI.2010.14.2.217

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Productivity Spillover Effect of Foreign Direct Investment into Korea

Author

Hyuk Hwang Kim

Korea Institute for International Economic Policy (KIEP)

hhkim@kiep.go.kr

June Dong Kim

jdkim@kiep.go.kr
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

This paper aims at analyzing the FDI spillover effect in accordance to the industrial forward and backward linkages effect during the entire (1990~2008) and recent (2001~2008) periods. The System Generalized Method of Moment has been utilized in order to solve the endogeneity issue. As a result, spillover effect within the industry has been diminishing recently consequently leading to the presence of backward linkage effect but no forward linkage effect. According to the system GMM result, the backward linkage effect in the manufacturing and services sector has increased more recently. Also, the backward linkage effect in the service sector is increasing further than that of the manufacturing sector. The analysis concludes that it is meaningful to note the importance of attracting FDI to the service sector as it results in greater spillover effect than in other sectors.

JEL classification: F21, F23

Keywords

Foreign Direct Investment (FDI), Forward and Backward Linkages Effect, System Generalized Method of Moment

Language

English

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