Impact of FDI on Competition in Korean Manufacturing Industries: 1991-97

Mikyung Yun ()
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Mikyung Yun: Korea Institute for International Economic Policy

East Asian Economic Review, 2001, vol. 5, issue 2, 111-140

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.

Keywords: Foreign Direct Investment; Competition; Market Structure; Korea (search for similar items in EconPapers)
JEL-codes: F21 L10 L60 (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:ris:eaerev:0237

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