The ultimate goal of international development cooperation is to support and enhance the economic and social development potential of recipient countries. To this end, international development cooperation, or Official Development Assistance (ODA), has played a crucial role in this context. Conversely, the proportion of ODA within the total financial flows to developing countries has been steadily declining, while the shares of private finance and Foreign Direct Investment (FDI) are rapidly expanding. Within the changing environment, the global society is moving beyond the traditional aid-centered approach, exploring new development financing strategies such as Aid for Trade (AfT), promoting private investment or mobilizing private resources, and combining public and private funds.

Korea has also seen its public sector play a crucial catalytic role in stimulating private sector vitality during its industrialization process. Specifically, public investments in industrial complex development, expansion of social infrastructure, and workforce training laid the groundwork for private investment, thereby simultaneously expanding exports and employment. This experience offers significant implications for establishing a Korean model of international development cooperation.
This study originates from this problem awareness and aims to propose a Korean ODA model that links international development cooperation with foreign direct investment. Specifically, it addresses the following questions. First, why is the policy of attracting foreign direct investment important, and what structural changes has Korea's foreign direct investment undergone? Second, what are the specific impacts of Korean conglomerates' investments in Vietnam on local industrial productivity, the industrial ecosystem, and further industrial diversification? Third, when comparing Vietnam's economic zones with Korea's Free Economic Zones (FEZs), how can Korean companies participate in development cooperation projects to maximize mutual benefits and sustain win-win cooperation?

This study is composed of the chapters as follows. Chapter 2 comprehensively analyzes the theoretical importance of attracting foreign direct investment (FDI) and the trends, structure, and policy changes in Korea's FDI. Chapter 3 empirically analyzes the impact of investments by major Korean corporations, such as Samsung Electronics, in Vietnam on local corporate productivity, supply chain structures, and industrial diversification. Based on this analysis, it derives implications for linking FDI and ODA. Chapter 4 compares and evaluates Vietnam's economic zone policies with the experience of Korean FEZs. It outlines strategies and demand for Korean corporate participation in Vietnam's economic zone development cooperation, while comprehensively proposing directions for Korea-Vietnam cooperation.
The significance and importance of this study can be summarized as follows. First, it reconceptualizes ODA and FDI as complementary domains, linking this framework to Korea's development cooperation strategy. While previous research and policy discussions tended to treat ODA and FDI as separate domains, this study emphasizes that FDI inflows can be either facilitated or hindered depending on how ODA is structured. It synthesizes theoretical and empirical findings: ODA focused on existing infrastructure and human capital reduces private investment risk and improves the investment environment, whereas ODA involving direct market intervention risks substituting or distorting private capital.

Second, this study is significant in that it systematically analyzed the overseas investments of Korean conglomerates―particularly the case of Vietnam―from an international development cooperation perspective. While Korean conglomerates' investments in Vietnam have primarily been discussed in terms of securing production bases and cost reduction, this study specifically demonstrates their ripple effects on local firms' productivity improvement, industrial diversification, and changes in the regional industrial ecosystem through quantitative analysis and industrial spatial analysis. This empirical result provides crucial evidence for considering how Korea's ODA should be combined with private investment.

Third, it is also highly significant in proposing K-model with 'AfT-FDI-International Development Cooperation' package by comparing Vietnam's economic zones with Korea's economic free zone policies and presenting a model for Korean corporate participation in development cooperation, focusing on Vietnam's central and northern economic zones. Vietnam's economic zones serve as hubs for balanced national development and industrialization, yet room for improvement remains in terms of specialization strategies, settlement conditions, and integrated support systems. Therefore, this study presents a strategic cooperation framework that combines Korea's economic free zone experience with international development cooperation. This approach aims to simultaneously achieve the upgrading of Vietnam's economic zones and the expansion of Korean corporate entry.

Finally, this study presents the potential of a K-model for international development cooperation that combines private and public sectors through analysis based on actual data and case studies. Considering that Korea's demand for international development cooperation has been concentrated in the industrial and economic development sectors, and that Korea's areas of differentiation from other donor countries have been industrial complexes, economic zones, and manufacturing infrastructure, this research provides important foundational data for establishing international development cooperation policies based on scientific analysis.
The core of this study lies in moving beyond the existing perspective that views international development cooperation and foreign direct investment as separate domains, and instead redefining ODA as an institutional facilitator that attracts private capital while fostering industrial ecosystems. To this end, by examining the structural changes in Korea's overseas direct investment, the investment case of Korean conglomerates in Vietnam, and comparing Vietnam's economic zones with Korea's Free Economic Zones (FEZs), this study sought to propose the direction for a Korean-style international development cooperation model that integrates ODAFDI-industrial policy-regional policy. This endeavor holds particular significance as it draws concrete implications for actual policy and project design by using Vietnam―a country that has emerged as a key target for Korean corporate expansion―as a case study.

The main findings and implications of this study can be summarized as follows. First, by outlining the importance of attracting foreign direct investment and the structural changes in Korea's FDI, it demonstrated the foundation upon which future international development cooperation strategies should be designed. FDI is known to contribute to growth through multiple channels, including capital accumulation, fixed capital formation, job creation, technology transfer, and productivity enhancement. Consequently, numerous countries have pursued investment attraction policies at the national strategic level. Korea, too, has rapidly expanded the scale of its foreign direct investment since the 1980s. Initially, investment was concentrated in manufacturing and certain resource sectors, but it gradually diversified into finance, services, and high-tech industries. Regionally and by country, the United States and China have long been key investment destinations. However, Vietnam's share has recently expanded rapidly, reflecting a trend toward the reorganization of global production hubs toward Southeast Asia. Regarding investment entities, large corporations still account for a significant share, but the role of other investors, such as pension funds, has grown, while the proportion of small and medium-sized enterprises (SMEs) has stagnated or declined. These changes indicate that overseas investment is evolving from a single strategy of large corporations into a complex structure involving diverse participants. This suggests that future policies linking Official Development Assistance (ODA) and FDI should also be designed based on this structural shift.

Korea's overseas direct investment is not merely a means of relocating domestic production bases or reducing costs; it is closely intertwined with the restructuring of global value chains, domestic industrial restructuring, and changes in export structures. This implies that international development cooperation policy should not be designed as an independent domain separate from trade, investment, and industrial policies, but rather should be designed in conjunction with them, taking into account the sectoral, regional, and whole economic structure of FDI. Particularly for countries like Vietnam, where Korea's investment share is growing, it is essential to thoroughly analyze FDI patterns by industry, region, and enterprise type. Based on these findings, a tailored ODA strategy should be pursued to create a mutually beneficial structure for both Korean companies and the recipient country.

Second, it quantitatively demonstrated the actual impact of FDI on the industries and enterprises of the recipient country, using the case of Korean conglomerates' investments in Vietnam. First, it reviewed the theory on the relationship between ODA and FDI, highlighting its dual nature: while ODA that strengthens existing infrastructure and human capital forms a complementary relationship by improving the investment environment and reducing risks to promote FDI, ODA that directly intervenes in the market can substitute for or distort private investment. Subsequently, the analysis of Samsung Electronics' investment case in northern Vietnam reveals that electronics and machinery firms near Bac Ninh and Thai Nguyen―where Samsung's major production bases are located―exhibited statistically significant improvements in total factor productivity and labor productivity. Notably, newly established firms after Samsung's entry demonstrated higher productivity than existing firms. This suggests increased strategic entrepreneurship targeting integration into large corporations' supply chains and the entry of firms with higher capabilities into the market. Furthermore, analysis by firm size revealed that SMEs experienced a greater improvement in productivity. This implies that firms with higher potential for linkage to large corporations directly experience the positive spillover effects of FDI more intensely.

Furthermore, the analysis of industrial diversification and industrial spatial patterns revealed that Vietnam's industrial structure is characterized by 'diffuse services + concentrated manufacturing.' This demonstrates that the industrial structure is being reorganized into a dual structure of 'operations and services.' While the service sector is spreading widely across diverse regions, manufacturing is showing a stronger tendency to concentrate in existing hubs where Samsung and other foreign-invested companies are clustered. Analysis of 'related diversification' and 'unrelated diversification' reveals that Vietnam is pursuing a relatively stable expansion of its industrial portfolio through 'related diversification'―expanding into industries with similar existing industrial, technological, and labor structures. Simultaneously, in some regions, it is in the early stages of attempting 'unrelated diversification' into high-value-added industries that are difficult to enter solely with existing capabilities.
It is clear that FDI from large Korean corporations has had a positive effect on Vietnam's productivity and industrial diversification, but it was pointed out that this effect has not been sufficiently reflected in ODA and public policy design. While it is true that ODA focused on hard infrastructure like roads and power provided the foundational conditions for attracting FDI, areas such as vocational training within industrial complexes, strengthening technical and quality capabilities, and building innovation ecosystems remained the responsibility of individual private companies. This raises the issue that a systematic linkage between development cooperation and FDI is necessary.

Third, we compare and evaluate Vietnam's economic zones with Korea's free economic zones, and concretize strategies for participating in international development cooperation by analyzing cases of Korean companies entering Vietnam's economic zones. Vietnam has designated over 40 economic zones, including coastal and border economic zones, to serve as hubs for attracting FDI and fostering regional industries. The Haiphong Dinh Vu-Cat Hai Economic Zone has grown into an electronics and materials cluster, accounting for a significant portion of the region's total FDI, based on large-scale investment by the LG Group. Large-scale development projects involving Korean construction and energy companies are also underway in central and north-central economic zones such as Nghe An, Truong Son, and Thanh Mai-Lang Co.. These example demonstrates that economic zone development is evolving beyond the simple sale of factory sites into a complex development model integrating urban development, industrial complex creation, tourism and services, and logistics and energy infrastructure.

At the same time, compared to Korea's experience with its Free Economic Zones, Vietnam's economic zones still have significant room for improvement in terms of specialized industry strategies, residential conditions, and administrative and support systems. It is important to note that Korea accumulated experience not only in building infrastructure but also in improving residential environments such as education, healthcare, and housing, unifying administrative support, and refining regulatory and incentive systems during the process of establishing Free Economic Zones centered around Incheon, Busan-Jinhae, and the Gwangyang Bay area.
Sharing Korea's experience with Vietnam and combining G2G policy cooperation with PPP and blended finance models through economic zones can simultaneously achieve the upgrading of Vietnam's economic zones and the stable entry of Korean companies. Furthermore, by dividing the entire cycle of industrial energy ODA project implementation into stages―"planning-feasibility study-execution-operation-reinvestment"―and specifying how ODA, policy finance, and private investment should share roles at each stage, it provides a concrete framework usable for actual project design.

Finally, it presented a clearer direction for Korea's future international development cooperation. Above all, ODA must be redesigned not merely as a means of supplying infrastructure or supporting individual projects, but as a strategic tool that promotes private investment and underpins industrial ecosystems and regional development. By promoting package-type projects that combine ODA, PPP, policy finance, and private investment, centered on economic zones, industrial complexes, and key hubs with significant FDI spillover effects, and institutionalizing a triangular cooperation structure involving large corporations, SMEs, and local enterprises in the process, we can simultaneously pursue development outcomes and benefits for our companies. Furthermore, by selecting strategic industries and regions through industrial space and industrial diversification analysis, we can lay the groundwork for spreading the Korean ODA-FDI linkage model not only in Vietnam but also in other developing countries.

Based on the analysis results and implications, the following policy recommendations are proposed: First, we must refine the ODA-linked Country Partnership Strategy (CPS) in line with attracting FDI. When establishing CPSs for key partner countries, including Vietnam, strategies for attracting FDI and allocating ODA should be designed in an integrated framework across industrial, economic zone, and urban development sectors. The ODA project portfolio should ideally include not only hard infrastructure like roads and ports, but also soft infrastructure projects directly linked to FDI, such as vocational training centers, quality and standards centers, and R&D and innovation support platforms within industrial complexes.

Second, pilot projects for economic zone-based PPP and blended finance models could be pursued. It is necessary to pilot PPP and blended finance models involving Korean public developers (such as LH), private companies, and Vietnamese central and local governments, targeting economic zones in northern Vietnam (near Haiphong, Bac Ninh, and Thai Nguyen) and central Vietnam (such as Can Tho-Lang Co and Chu Lai). It is crucial to design a structure linking project identification, feasibility studies, implementation, operation, and reinvestment, referencing the economic zone project model and full project life-cycle presented in this study.
Third, we design and implement a triangular cooperation program involving large corporations, SMEs, and local enterprises. Considering the productivity and industrial diversification effects revealed in Samsung Electronics' investment case in Vietnam, future development cooperation projects should bundle initiatives such as fostering SME vendors linked to large corporation FDI projects, strengthening local SME capabilities, and joint technology and quality improvement programs. This study provides quantitative and qualitative evidence that can serve as a reference for designing such programs.

Fourth, we select strategic industries by utilizing industrial space and industrial diversification analysis. In this regard, related/unrelated diversification analysis results should be used to select strategic industrial clusters and priority regions for policy support. Here, specific examples such as manufacturing hubs with concentrated FDI and service sector expansion hubs, or cases of related/unrelated diversification, can be referenced. Based on this, a plan combining Korean ODA and FDI to focus support on high-value-added manufacturing and knowledge-based service sectors can be introduced.

Fifth, we establish and operate a policy exchange platform between Korea and Vietnam's economic zones and free economic zones. It is desirable to establish a permanent policy exchange platform involving the governments of both countries, relevant agencies, public developers, and research institutions to link Vietnam's economic zone policies with Korea's operational experience in economic free zones. This platform is expected to facilitate joint discussions on various agendas, including economic zone designation criteria, incentive and regulatory systems, improvement of the residential environment, smart city and eco-friendly development, and to identify joint planning and feasibility study ODA projects.

In conclusion, this study organically integrates the entry of Korean conglomerates into Vietnam, Vietnam's economic zone policy, Korea's experience with economic free zones, and international development cooperation strategies. It outlines a new international development cooperation paradigm where ODA functions as an 'institutional facilitator for attracting private capital.' These analytical findings imply potential for expansion not only to Vietnam but also to other developing countries in the future. Korea's accumulated experience in industrial complex and economic zone development, along with its expertise in fostering large-corporation FDI and SME vendors (suppliers), can be applied to countries at a similar stage of industrialization as Vietnam. This enables the deployment of a new development cooperation model through an ODA-FDI linkage strategy. If this model is implemented through concrete projects and institutional frameworks in future follow-up research and policy design, Korea is expected to establish itself as a leading nation in comprehensive economic cooperation that integrates development cooperation and overseas investment.