The Trade Effect Of Outward Direct Investment

China and South Korea have a high similarity in geographical location,economic development and social culture in Asia.China and South Korea’s Outward Direct Investment have many same regular pattern,but also have differences.South Korea in Outward Direct Investment go ahead step,relatively high compared with the economic scale,has obtained the success.It has promote the export,optimize the structure of the domestic industry.To compare and analyze Outward Direct Investment of China and South Korea,find out the deficiencies of their own development,can provide policy suggestions for the better development of Outward Direct Investment.In addition,China has provided the development opportunity for the manufacturing industry,especially the high technology manufacturing industry,and South Korea is a typical manufacturing power country,it has important significance for the investment of its manufacturing sector.In addition,both the Outward Direct Investment of the two countries have the characteristics of avoiding trade barriers to trade,and the governments play a leading role in the economic development.So it has practical significance to make a comparative analysis of the Outward Direct Investment and the trade effects between the two countries.The trade effect of Outward Direct Investment between China and South Korea is the study of the newly industrialized country and the developing country in the transition,can further enrich the theory of outward investment.In this paper,combining the existing research results and the analysis of the present situation,theoretical and quantitative analysis.Firstly,the Outward Direct Investment theory is reviewed,and also sum up the existing trade effects of Outward Direct Investment,Outward Direct Investment of China and South Korea are compared,and the mechanism of Outward Direct Investment is analyzed,the impact on the trade effects from the short-term and long-term from the point of view,in addition to the impact of Outward Direct Investment on the size of the effect of the study,the paper also carried out the research on the effect of trade structure.In addition,there is little research on the Outward Direct Investment trade effect of China’s manufacturing industry.This paper also makes a comparative analysis of the trade effects of South Korea as a manufacturing power country.Moreover,in the case of the two countries with the representative of outward investment in the manufacturing enterprises as example,the conclusion has practical significance.In this paper,the measurement and analysis of the trade effects of Outward Direct Investment is carried out by using the method of co integration test.The results indicate that ODI has a positive effect on exports,and through the test of trade structure,it is found that Outward Direct Investment can greatly promote industrial manufactured goods,which has a positive effect on improving the trade structure.In addition,it is found that China’s Outward Direct Investment in China’s manufacturing industry has a greater role in promoting exports.Finally,based on the theoretical analysis and empirical analysis,and draw on the experience of South Korea’s outward investment,to explore the limitations of China’s Outward Direct Investment development,from two aspects of government and enterprises to seek countermeasures,and put forward the corresponding suggestions.