Since the mid-1990s, the inflows of FDI expanded suddenly throughout the world, leading multinational corporations into the new era of global management. Responding to economic globalization and regional integration, multinational corporations started an influential trend of large-scaled acquisition and merge in order to strengthen competitive global position and to carry out global management strategy.Especially since 1997, transnational merger and acquisition have reached its climax and has become the major form of direct foreign investment. Competition has become fiercer due to free trade and regional integration, and regional reorganization and coordination has been pushed forward. Consequently transnational mergers and acquisitions have been powered on, and have been made easy by the liberalization of capital market and the rapid development of new integrated financing measures. The merger, acquisition and reorganization of international corporations is of a truly global nature, as it is happening all around the globe, influencing almost every country included in the integrated global economic system. It has great impact on the development of international economy.Since the 1990s, Korea has transformed from an FDI net exporter into a net importer, its total imported FDI reached the historic climax. This has direct relationship with absorbing foreign capital though transnational merger and acquisition. In the financial crisis in 1997 an opportunity was provided for transnational mergers and acquisitions, and the country's using this form of investment to attract FDI has made undeniable contribution to getting out of the crisis.This paper stated Korea's general situation and feature of absorbing foreign direct investment through transnational merger and acquisition in the later years of 1990s with the global transnational merger and acquisition as the background and common theories as the basis of analysis. And then it analyzed the contributing factors of absorbing foreign direst investment through transnational merger and acquisition in Korea at the end 1990s,in the meanwhile, made a comment. At last, it pointed out the enlightenment to out country.Transnational acquisition and merger is an unavoidable trend in the development of global economy. It has already become a significant part in foreign direct investment. Not a single corporation can ignore the general background of economic globalization when deciding its operational strategies. China is in the key stage of pacing up systematic adjustment and industrial upgrading. In the process of attracting foreign direct investment, a keen desire is felt by foreign investors for the merger and acquisition of China's state-owned corporations. Meanwhile, the reform in state-owned corporations also calls for their merger and acquisition into multinational corporations to speed up their reorganization and to improve their international competition advantage. This is a win-win choice under new circumstances. China has much to learn from Korea's experience of attracting FDI through transnational merger and acquisition in the late years of the 1990s. |