South Korea: Country Attractiveness Report
FACULTY OF BUSINESS AND ECONOMICS
KATHOLIEKE UNIVERSITEIT LEUVEN
D0M19B - International Business Strategy
SOUTH KOREA Shortened Country Attractiveness Report
Antoine Hirschland
Prof. Dr. Sleuwaegen Leo
– 2010 –
I.
Introduction
Thanks to the globalization, Asian economy is drawing more and more the attention of the rest of the world. Nevertheless, when we talk about economic growth in Asia, we think mostly about China, India or Japan whereas South Korean economy is staying quite unknown in Belgium. However, since the war in the Korean peninsula and the formation of the Democratic People's Republic of Korea (North Korea) and the Republic of Korea (South Korea) in 1948, South Korea has becoming a major economic power. Indeed, South Korea ranked fifteens (in terms of GDP) among the best world’s economies and fourth among Asian economies in 2009. To reach this, the Korean economy has experienced three development stages since the end of the Korean war: the economic autonomy increase from the ’50 to the ’60 in order to become less dependent on importations; the massive expansion of exportations during the ’70; the development of some industries form the ’70 until now to become one of the world leader in sectors like high technology, automotive, shipbuilding and steel industry. Furthermore, since the financial crisis of 1997, we can observe a decrease of the government intervention in the Korean economy and the development of a market-oriented economy. But South Korea is currently facing important difficulties like the lack of raw materials, the small size of the country, the competition with Chinese and Japanese industries and the political and military issues with North Korea. The purpose of this paper is to study the economic attractiveness of South Korea based on the “Diamond Model” framework of Porter (1998). We will also examine the main industries, the balance of trade and the political and commercial risks of investing in South Korea.
KATHOLIEKE UNIVERSITEIT LEUVEN
D0M19B - International Business Strategy
SOUTH KOREA Shortened Country Attractiveness Report
Antoine Hirschland
Prof. Dr. Sleuwaegen Leo
– 2010 –
I.
Introduction
Thanks to the globalization, Asian economy is drawing more and more the attention of the rest of the world. Nevertheless, when we talk about economic growth in Asia, we think mostly about China, India or Japan whereas South Korean economy is staying quite unknown in Belgium. However, since the war in the Korean peninsula and the formation of the Democratic People's Republic of Korea (North Korea) and the Republic of Korea (South Korea) in 1948, South Korea has becoming a major economic power. Indeed, South Korea ranked fifteens (in terms of GDP) among the best world’s economies and fourth among Asian economies in 2009. To reach this, the Korean economy has experienced three development stages since the end of the Korean war: the economic autonomy increase from the ’50 to the ’60 in order to become less dependent on importations; the massive expansion of exportations during the ’70; the development of some industries form the ’70 until now to become one of the world leader in sectors like high technology, automotive, shipbuilding and steel industry. Furthermore, since the financial crisis of 1997, we can observe a decrease of the government intervention in the Korean economy and the development of a market-oriented economy. But South Korea is currently facing important difficulties like the lack of raw materials, the small size of the country, the competition with Chinese and Japanese industries and the political and military issues with North Korea. The purpose of this paper is to study the economic attractiveness of South Korea based on the “Diamond Model” framework of Porter (1998). We will also examine the main industries, the balance of trade and the political and commercial risks of investing in South Korea.