Foreign Investors' Evaluation on Korean Government Policies for Foreign Direct Investment

The Korean business environment is not still satisfactory although the government began to actively attract foreign manufacturing since its financial crisis in late 1997. This paper aims to investigate how foreign manufacturers in Korea evaluate the government policies concerning inward foreign direct investment (FDI). The empirical results show that the evaluation of foreign firms on Korean FDI policies is below the medium level. The findings are, (1) foreign respondents' satisfaction is the lowest on the subsidy policy, (2) their overall satisfaction is most responsive to the changes of labor policy and tax incentives, (3) small firms and Japanese firms show less satisfaction than their counterparts, and (4) foreign firms in industrial complexes of rural areas show higher satisfaction than those in metropolitan areas. From the results, it is suggested that the government should provide foreign manufacturers with a high level of subsidies, favorable labor policy, equitable benefits of incentives, and industrial complexes suitable for plant operation