We have begun the paper with an excuse and are going to
end the paper with another. We have tried to show the effects
of foreign direct investment on recent Korean economic growth,
but the results have been disappointing. What we have picked
up are only some vague feelings about the position of foreign
direct investment in Korea.

Foreign direct investment has created some jobs, particularly
in some manufacturing industries like chemicals. electronics and
machinery. Foreign direct investment also appears to have made
substantial contribution toward the improvement of balance of
payment, mainly through export and import activities. Its effect
of technological development is not certain, but should have been
positive.

A simple calculation of value added created by foreign firms
shows that the probable range of contribution made by foreign
investment to overall economic growth has been about one per
cent per year. But, this is not the same as saying that, without
foreign direct investment, Korea would habe grown one per cent
less per year on the average. It is simply not possible and
meaningful to present any figures in explaining contributions
made by foreign investment to economic growth.

As noted earlier many times, foreign direct investment
affects the productivity, efficiency, and technology levels of
domestic firms through competition and raw material purchases.
Foreign direct investment could also affect domestic market
structure, or even industrial development patterns. As such, it is
plainly impossible for any economist to say that foreign direct
investment has made a certain percentage point contribution
toward economic growth.

Moreover, macroeconomic figures, though they are helpful by
themselves in understanding relative position of foreign direct
investment, could not reveal the actual role foreign firms have
played in individual industries, and could not be of much guide
in devising foreign investment policies by the government.

Thus, I would like to conclude the paper with the
observation that macroeocnomic analysis of foreign direct
investment, if not complemented by industry-specific studies,
would not help us much in understanding true role foreign firms
has played in the economy.

Ⅰ. Introduction
Ⅱ. Foreign Investment Policies in Korea
Ⅲ. Patterns of Foreign Direct Investment in Korea
Ⅳ. Some Macroeconomic Effects of Foreign Direct Investment
Ⅴ. Some Macroeconomic Effects of Foreign Direct Investment
Ⅵ. Contribution of Foreign Investment to Economic Growth
Ⅶ. Conclusion