A Model for Managing Foreign Investment based on a Case Study of South Korean Foreign Investment System

Long since it has been considered very important to develop capitals، increase economic growth، expand intra-regional economic communications and transactions and in short produce national wealth. Around late 1980’s، South Korean corporations began to invest in industries and corporations overseas، technically known as outward foreign direct investment (FDI). Initially، South Korean government imposed some limitations and impediments on the initiative. From among the reasons given by the Korean government to obstruct outward FDI، one could refer to “lack of a suitable managerial system” or “envisaged malefic impacts on the national industry، educational system and employment”. Given the increasing number of domestic investors compared to that of outward ones، the Korean government started devising an all-out approach to managerial issues and a widespread systematic plan to organize investment system of the country. This scheme began to consider investing in foreign industries and corporations as a positive approach protected by national support. As the scheme was further developed، there came a time when there was a need to invest in domestic industries; So، Korean outward FDI switched its role to absorb foreign capitals inward، better known as inward FDI. This article tries to survey both outward and inward FDI to examine their influence on investment processes and areas، employment، trade، competitive advantage and technological transfer into South Korea. In the end، the results are analyzed and some recommendations are given to adopt an all-out and comprehensive managerial approach to investment.