author : Byungki Ha (Industrial Cooperation and Globalization Division)

1. Introduction
Coupled with the worldwide trend towards foreign direct investment and the domestic liberalization of inward and outward direct investment systems, Korea has seen a surge in both types of investment since the late 1980s.
In the beginning of economic development, Korea was not receptive to foreign direct investment and even tried to restrict it. It was the financial crisis that began near the end of 1997 that brought about drastic changes in the general public’s view of foreign direct investment and of the role and functioning of multinational enterprises(MNEs). Now, a widespread consensus has formed that multinational enterprises helped Korea to recover from the crisis by serving as a source of capital.
Nowadays, the role that foreign direct investment is expected to play has been changed to a major source of economic growth and restructuring, and furthermore the replacement of outward direct investment. Accordingly, Korea has been strengthening policies and designing new tools to attract foreign investors. The amount of foreign investment itself is considered as an important indicator of economic performance and the business environment...