This article has been written based on a part of the policy analysis 06-04 of KIEP titled as ‘Foreign Direct Investment and De-industrialization’ (in Korean).
Foreign Direct Investment and De-industrialisation
Article first published online: 20 FEB 2011
© 2011 Blackwell Publishing Ltd
The World Economy
Volume 34, Issue 2, pages 313–329, February 2011
How to Cite
Kang, S. J. and Lee, H. (2011), Foreign Direct Investment and De-industrialisation. World Economy, 34: 313–329. doi: 10.1111/j.1467-9701.2010.01324.x
- Issue published online: 20 FEB 2011
- Article first published online: 20 FEB 2011
The purpose of this study is to discuss the various issues regarding de-industrialisation and to systematically analyse the causes of this phenomenon. In addition, the effect of the recent increase in foreign direct investment on de-industrialisation will be analysed. Unlike extant studies, this study employs a more reliable method of estimation, known as the generalised method of moments system, for establishing the importance of foreign direct investment (FDI) with regard to de-industrialisation. For a general assessment of the different factors of de-industrialisation, including FDI, this study classifies the causes of de-industrialisation in OECD countries into external and internal factors. As a result, the analysis has proved that not only internal and external factors are major factors of de-industrialisation, FDI inflow and outflow are also major factors.