U.S. and Japanese Foreign Direct Investment in East Asia: A Comparative Analysis

East Asia has led the world in economic growth and export expansion in recent decades. The phenomenal rate of economic growth among the so‐called “four little tigers”—Hong Kong, Singapore, South Korea, and Taiwan—enabled them to achieve newly industrializing country (NIC) status in the 1980s, followed by Indonesia, Malaysia, and Thailand. Earlier studies explained the development from the government‐led development paradigm, or the so‐called the statist approach. Scholars also argue that foreign direct investment (FDI) played an important role in the economic development, thanks to technology transfers. Kojima and Ozawa and later Kohama, however, argue that Japanese FDI help East Asian economies while U.S. FDI do not because Japanese technology transfer practices are appropriate for East Asian countries but not the United States'. Thus, we revisit the issue of East Asian economic development and test the economic effects of FDI from the United States and Japan. Using a Barro‐type growth model, we test the effects of FDI from the United States and Japan on economic growth in East Asian NICs. We find that FDI from both the United States and Japan helped economic growth in the “four little tigers,” but not in Indonesia, Malaysia, and Thailand.     

Managing Policy Dilemmas in South Korea: The Case of the Emissions Trading Scheme

This paper analyses the policy dilemma of South Korea’s Lee Myung-bak government regarding the greenhouse gas Emissions Trading Scheme (ETS), the cornerstone of the government’s Low Carbon Green Growth (GG) policy. The paper analyses policy governance, with a focus on the deliberative nature of the policy process. The ETS was promoted as a way to overcome certain international, political and socioeconomic challenges facing the government, yet the process of its establishment featured severe confrontations between the stakeholders (industrialists and environmentalists), and a lack of effort on the part of the government to pursue deliberation with them, resulting in a significant policy dilemma. The government reacted passively at first, and later responded with a symbolic decision that failed to pursue deliberative processes and exacerbated the situation. This paper addresses the theoretical and policy implications of this policy process by identifying the mechanism that created the policy dilemma. The reliability and validity of the study are substantiated through a multi-strategy approach, including a review of the literature and an in-depth interview with a government economic official.