How population ageing affects FDI flows: a tale of South Korea

Rajarshi Mitra, Md. Thasinul Abedin and Kanon Kumar Sen

New Zealand Economic Papers, 2025, vol. 59, issue 2, 102-123

Abstract: The neoclassical theory predicts that population ageing would reduce net FDI inflows, which would nullify government efforts to attract FDI. There is a complete paucity of literature on the dynamic relation between population ageing and FDI flows for South Korea. This is a distinctive attempt to test the hypothesis that population ageing reduces net FDI flows (% of GDP) in South Korea. The results of the ARDL bounds testing approach to cointegration analysis under structural breaks provide clear evidence of non-linearity between population ageing and net FDI flows (% of GDP). Support for the neoclassical hypothesis is established only in the short-run.

Date: 2025
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DOI: 10.1080/00779954.2024.2415138

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