• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.58
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• pp.313-328
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• 2013

Today FTA extends over the world and Korea as a main member of international trade is no exception. In the past Korea, as the developing countries, has made endlessly effort to induce foreign investment from foreign enterprise and/or government to be a truly OECD countries today and made it. Korea's trade economy was reached 1 trillion dollars in 2012. Now we have to find a new way to produce, process, procure goods from foreign investment and also need to protect our profit and/or rights within foreign judicial territory. There are two method to protect foreign enterprise or government. First they rely on general principles in WTO or Bilateral Investment Treaty that the principle of equality, national treatment, and most-favored-nation treatment, you can create a predictable environment to protect foreign enterprise and/or government. Second they need to incorporate contractual clauses in their agreement such as stabilization clause, force majeure, arbitration, governing law or sovereign immunity. Of course there are many things left behind to consider I hope it will be helpful to those who prepare foreign investment contract.

• Journal of Arbitration Studies
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• v.27 no.2
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• pp.3-18
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• 2017

International legal reviews on ISD, a procedure for resolving disputes under the Korea-US FTA, are examined from the perspective of law. If the ISD system does not exist, even if the investor suffers damage due to the illegal act of the host country, he or she must file a lawsuit through the court of the host country, which is unreasonable from the investor's point of view and makes it difficult to guarantee fairness and transparency. Some of the Koreans pointed out that there are some problems with the KORUS FTA dispute settlement regulations, and that the United States federal courts are taking a friendly attitude to the decisions made by the US Customs in determining the dispute by the KORUS FTA Agreement and the US Customs Act. In cases where the State does not violate international law but results in harmful consequences, the responsibility of one country is borne by the treaty. Foreign investment always comes with many challenges and risks. Therefore, the ISD system is a fair and universal arbitration system, which is considered to be a necessary system even for protecting the Korean companies investing abroad. In the investment treaty, compensation for the nationalization of foreign property and reimbursement under the laws of the host country were dissatisfied with foreign investors. In particular, some Koreans have pointed out that there are some problems in the KORUS FTA dispute resolution regulations and there is a need for further discussion and research. Based on the experiences and wisdoms gained in the course of Korea-US FTA negotiations, the dispute arbitration mechanism is urgently needed to reduce the possibility of disputes and to make amicable directions.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.43
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• pp.481-507
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• 2009

Along with continuous increase in international investments encouraged by wide spread bilateral investment treaties (BIT) including free trade agreements (FTA), international investment disputes have been also increasing. This means that a host State, an importer of foreign investments, and a investor who exports its investment to foreign State, need to take measures to prevent international disputes arising from international investment or to prepare for the arbitration for resolving the disputes. Under these circumstances, this paper compares ICSID arbitration rules and UNCITRAL arbitration rules in respect of (i) the institution of arbitration, (ii) the appointment of arbitrators and the composition of arbitral tribunal, and (iii) the procedures for, and the form of, arbitral awards. On base of this comparison, this paper further suggests certain practical issues that the host State's government and the foreign investors should be aware of in order to be ready for the resolutions of disputes by ICSID or UNCITRAL arbitrations.

• Journal of Arbitration Studies
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• v.20 no.1
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• pp.109-131
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• 2010

Investment Agreement is to be a part of FTA, as negotiating together both trade and investment. For example, it has a separate chapter about investment in KORUS FTA contract and is more detailed and inclusive than BIT contents which are traditional investment provisions. It is called to the investment norm of FT A. The investment agreement lures a foreign investment by providing the environment which is stable to the foreign investors. Hence, it plans in goal for the economic development of the home country. In international investment, the arbitration award cases are coming out to be divided into two parts applying MFN provisions in investor protective principles and dispute resolution process; the tendency of broad interpretation and the tendency of limited interpretation. In the case of RosInvest Co UK Ltd v. the Russian Federation awarded in 2007, the arbitration tribunal interprets that the application scope of MFN provisions contain the more lucrative dispute provision than other BITs without limitations in entity right of the investor. This judgment is the same view as arbitration tribunal position of Maffezini case. The arbitration tribunal of Plama case has kept out an assertion magnifying the arbitration tribunal's jurisdiction. That is, for applying more inclusive investor-nation resolution method from different treaty, tribunal mentioned that MFN provision had to see clearly a point of applying the investor-nation dispute resolution method. Dispute resolution process providing inclusive MFN provision has both the tendency of broad interpretation and the tendency of limited interpretation. It needs ceaselessly to do the monitoring about cases of arbitration award. In conclusion, the point where MFN provisions are applied conclusively is recognized, but it is still controversial whether or not to magnify the jurisdiction of arbitration tribunal applying MFN provisions. Therefore, it does not exist clear principle in the theory or in the award eases about the application scope for entity protection provision of MFN. Hence, The Korean government of Korea and local autonomous entities needs to keep their eyes on the trend of the international arbitration award cases in relation to the investment dispute for the future. Also, Korean government or local self-governing group must consider MFN provisions when they make a contract of international investment treaty such as writing concretely the application of MFN provisions from KORUS FTA.

• The Korean Journal of Financial Management
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• v.25 no.4
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• pp.53-78
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• 2008

Foreign investors who invest in the Korean stock markets are exposed to two kinds of foreign exchange rate risk, the economic exposure and the translation exposure. The former is the foreign exchange rate exposure in return generating process of the assets invested and the latter is the foreign exchange rate exposure in the translation of domestic return into foreign investors' currency. Domestic investors, however, are exposed only to foreign exchange rate exposure in the asset invested. This different situation on foreign exchange rate exposure between foreign investors and domestic investors can induce different response to exchange rate change by investor groups. Previous studies on foreign exchange rate exposure of Korean firms reported that quite a few Korean firms are exposed to foreign exchange risks and suggested to manage the foreign exchange risks. Also, many studies on the market segmentation showed that a market can be practically segmented according to the characteristics of investor groups. These studies support the hypothesis that the Korean stock market can be practically segmented by the foreign investors' attitude to the foreign exchange rate exposure. This study examines the response of both foreign investors and domestic investors to the foreign exchange rate exposures in Korean stock markets. Test results show that foreign investors increase their sell transactions when the foreign exchange rate exposure of the previous day is negative. This result can be possible when foreign investors attempt to actively manage the decrease in value of their assets due to rising of exchange rate. Analysis on the sell order data is also supportive to this interpretation. Foreign investors also increase their buy transactions when the foreign exchange rate exposure of the previous day is negative. This result can be possible when foreign investors use actively the relation between the increase in asset value and the translation gain due to declining of exchange rate. Analyses on buy order data, however, do not show the same result as the analyses on transaction data. This difference may come from the difference of information contained in transaction data and order data. In summary, the result of the paper supports the hypothesis that foreign investors response differently to foreign exchange rate exposure compared with domestic, Korean investors. Two groups do not show different response when exchange rate exposure is positive, i.e., as foreign exchange rate is increase (decrease), the asset value is increase (decrease). However, foreign investors' response is different from that of domestic investors when exchange rate exposure is negative, i.e., as foreign exchange rate is increase (decrease), the asset value is decrease (increase). These results mean that foreign investors and domestic investors are placed in different situations related to foreign exchange rate exposure, and these differences are reflected in the Korean stock markets. And domestic investors need to consider foreign investors' different attitude to the foreign exchange rate exposure when they analysis foreign investors' trading behavior.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.361-372
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• 2021

This research aimed to analyze the momentum strategy of foreign investors with the smallest trading transactions in the Indonesian stock market. This study applied a quantitative method approach using intraday transaction data of companies listed on the LQ-45 Index for March, April, and May 2017, obtained from the Indonesia Capital Market Institute (TICMI) which is a subsidiary of the Indonesia Stock Exchange (IDX). The number of companies with available data is 35 companies, consisting of 23 non-government stocks and 12 government stocks. The number of observations from the 35 companies was 8,686,030 observations where the government companies recorded 2,751, 545 and the non-government companies 1,387,016 observations. All data was then squeezed and grouped into small, medium, and large trade transaction orders. The data analysis method used was paired t-test with SPSS to analyze cumulative abnormal returns in the formulation and test periods. This study found that small foreign investors carried out momentum strategies on stocks listed on the LQ-45 Index. However, re-testing was done by separating government and non-government shares. It turned out that small foreign investors performed a momentum strategy on non-government and a contrarian strategy on government.

• International Area Studies Review
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• v.20 no.1
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• pp.79-104
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• 2016

This paper investigates the impact and behavior of foreign equity investment in Asian emerging economies during the 2007-2008 and the 2010-2012 global financial crises in terms of volatility and return. The empirical results indicate that foreign investors show positive feedback trading behavior in the sample countries. We find evidence that foreign investors' net selling behavior significantly increases market volatility in most countries.

• The Journal of the Korea Contents Association
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• v.13 no.12
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• pp.702-714
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• 2013

South Korea, China and Japan is struggling for a new economic growth and facing new challenges and difficulties in foreign investment. In this paper, I Studied on the Legal System and Limits or Rules on the Investment Between Korea, China and Japan. First, FTA between Korea, Chin. The trade and economic relations and the investment flows between the three countries were examined. Based on the background of the three countries, it has been studied on the Legal System and Rules in the foreign investment Between Korea, China and Japan. Based on this, and the following were examined. What are the major limits in the foreign investment Between Korea, China and Japan? In the future, what should be included on the FTA investment chapter in FTA between Korea, China and Japan in order to facilitate more investment? FTA between Korea, China and Japan would be an effective means to strengthen the protection of investors and investment facilitation, and investment flows between the three countries will be activated. In the future, FTA between Korea, China and Japan is expected to further promote investment among the three countries. In this regard, in the future, the FTA investment chapter in FTA between Korea, China and Japan should include NT(National Treatment), MFN(Most-Favoured-Nation (Treatment)), Prohibition of the implementation of specific measures, the nationality requirements of management or the board of directors, movement of funds, safeguard measures, expropriation and compensation, compensation for loss, fair and equitable treatment, the settlement of disputes between foreign investors and investment promotion country(Investor-State Dispute Settlement), and other agreement between the three countries.

• Management & Information Systems Review
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• v.30 no.4
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• pp.23-44
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• 2011

In this paper we examines the relation between net purchase of foreign and institution investors and stock returns in Korean stock market. For this study, KOSPI returns are classified into three parts: close to close, close to open and open to close returns. Close to close returns is measured by the closing price of t-1 day and the closing price of t day. Close to open returns is measured by the closing price of t-1 day and the opening price of t day. Open to close returns is measured by the opening price of t day and the closing price of the day. Empirically major findings are as follows. First, the previous day both foreign and institution investors' behavior have an statistically significant negative effect on the close to close returns. However, the current day their behavior positively affect close to close returns. Second, the previous day both foreign and institution investors' net purchase have a significantly positive effect on the open to close returns. Finally, the previous day foreign behavior has little effect on open to close returns, but institution investors negatively affect open to close.

• Management & Information Systems Review
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• v.31 no.4
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• pp.593-609
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• 2012

This study is designed to investigate whether the information spillover effect is existed between the foreign investors' unexpected volatility of net purchasing intensity and the volatilities of returns in terms of daily closing stock return, overnight return, and daytime return, before and after financial crisis in Korea. The result of this study shows that there is negative information spillover effect between the foreign investors' unexpected volatility of net purchasing intensity and the volatility of daily closing stock return for time t-1. However, there is an opposite result for time t, showing positive information transmission effect. For the overnight return, the test result provides there is no statistical significance between the foreign investor's unexpected volatility of net purchasing intensity and the volatilities of return. In addition, I found that the information transmission effect is existed between the foreign investor's unexpected volatility of net purchasing intensity and the volatilities of the daytime return for the entire timeline.