The assessment of Japanese foreign direct investment in Korea: A risk perspective in Korean industrialization policies

The purpose of the study is theoretically to place risk analysis in the political economy of development policies and to reveal Japanese direct investors' risk perceptions in the context of Korean policies toward foreign direct investment.;I emphasize that risk is best understood as the integration of the following: (1) the perception and adequate assessment of the risks that occur at a certain period of time in a certain situation; (2) the identification of management tools and techniques to deal with such risks which may seriously affect normal operating conditions; and (3) the development of corporate strategies to respond to risks. Accordingly, since risks are understood as contingencies between an organization and its environment, risk analysts need not only to be well informed about country factors--political, policy, economic, financial, social, and cultural--in which an organization is situated, but also they should be well trained in the field of strategic planning and management in the private as well as public sector.;For an exploratory empirical analysis regarding Japanese investors' risk perceptions in the context of Korean development policies, Korean policy priorities and instruments designed for the inducement or regulation of foreign capital are identified. As a result of the analysis of the data that were acquired from the survey of the executives who are managerially responsible for international operations in parent companies based in Japan, I found that Japanese foreign investors perceive Korean policies toward foreign direct investment as a risk rather than as an attractive factor for their investment and operation.;As a whole, Japanese investment projects are structurally secured by the trilateral coalition of politicians, bureaucrats, and financing institutions, by joint venture strategy, and by domestic and multilateral investment guarantee schemes. Yet Japanese managerial and organizational characteristics are often viewed as a risk factor in host countries. Korea is regarded by Japanese private investors as a country with high-market attractiveness but high-environmental or political risk.