ABSTRACT
At the beginning of the 90s, Korean firms embarked on a wave of foreign direct investment. By contrast, at the end of the 90s, the tide of inward investment flows has been rising as outward investment has stagnated. During its 30-year dash from one of the world's poorest nations to one of its richest, Korea has been familiar with such changes in course linked to policy evolutions. In 1996, FDI to Korea was just above USD 3bn; in 1998 it reached nearly 9 bn and it has increased further by 70 per cent in 1999 to USD 15.5 bn. Since 1998, acquisitions of chaebol businesses by foreign firms and joint ventures have been on the rise, including in high-tech and traditionally sensitive sectors. Philips of the Netherlands purchased half of LG Electronics flat-screen business for USD 1.6 bn. Samsung has handed over its defense-related operations to the defense equipment Samsung-Thomson CSF joint venture, to which Thomson will transfer advanced manufacturing technology. The French defense electronics group will also handle global marketing. Another topical example is the USD 610 million capital increase by Microsoft, Qualcomm and Canada's Capital Communications CDPQ in Korea Telecom's KT Freetel as part of a strategic alliance with the personal communications service provider.
