The Korean Journal of Economic Studies
The Impact of Labor Market Condition of a Host Country on Foreign Direct Investment from South Korea: Theory and Evidence
Hanna Jung (Korea Employment Information Service) and Sang-Kee Kim (Kangwon National University)Year 2018Vol. 66No. 3
This paper analyzes the effect of labor market condition of countries toattract FDI (foreign direct investment) from South Korea. To examine theeffect, first we set up a theoretical framework, then empirically test it usingthe unbalance panel data on OECD countries for the period of 2011~2012.From the empirical estimation, this study shows that trade union density of thehost countries has the negative effect on the FDI. However, employmentprotection and skill level of the countries do not show statistically significantimpacts on the FDI. Other control variables such as GDP, EU member, andRTA(regional trade agreement) participation are significant on the FDI.