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A Study on Factors Affecting Foreign direct Investment in Korea -Focused on Hofstede's Culture Dimensions and CPI Index-

한국의 외국인직접투자에 영향을 주는 요인에 관한 연구 - 문화적 차원과 부패인식지수를 중심으로-

  • Choi, A-Reum (Dept. of International Trade Graduate School, Sungkyunkwan University) ;
  • Koo, Jee-Hyun (Dept. of Business Administration, Hankuk University of Foreign Studies)
  • 최아름 (성균관대학교 일반대학원 무역학과) ;
  • 구지현 (한국외국어대학교 경영학과)
  • Received : 2017.02.03
  • Accepted : 2017.06.20
  • Published : 2017.06.28

Abstract

This study examined the factors influencing foreign direct investment(FDI) in OECD countries where Korea is a target country. The differences in the cultural distances of host and home countries and the difference in the perceptions of corruption have been used to identify the factors affecting foreign direct investment. As a result of the study, it was found that there are differences in foreign direct investment according to cultural dimension and corruption perceptions index. Foreign direct investment may increase or decrease depending on the cultural tendency and the higher the perceptions of corruption, the more active the investment. The smaller the power distance between host country and home country in the factors affecting foreign direct investment, the larger the number of investments and the larger the size of individualism versus collectivism. Foreign direct investment increased when the investing country's corruption perceptions index was high. The results of this study confirm that cultural and corruption perceptions can affect trade transactions. Therefore, it is necessary to consider the cultural tendency and the cultural distance in the trade transaction by confirming that the degree of culture and corruption perceptions can affect the trade transaction. And that it can influence trade and economic growth by appropriately managing social variables such as public corruption.

Keywords

Foreign direct investment;Hofstede cultural dimension;Culture distance;Corruption perceptions index;Trade

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