Jai S. Mah and Sunyoung Noh

The current paper compares the patterns of Japanese outward foreign direct investment (OFDI) in China with that of Korea. As a result of the opening up of the Chinese economy together with the accumulating foreign exchange reserves, their FDI in China has risen over the past decades. The share of Japanese FDI in China has remained less than 20 percent of Japanese OFDI as a whole, while Korean FDI in China reached two-fifths of its total OFDI. The gravity model appears to be suitable for explaining the pattern of Korean FDI in China. By industries, the manufacturing sector has accounted for as much as or over three quarters of Japanese and Korean FDI in China. The former appears to be focused more on value-added industries such as machinery contributing to transfer of advanced technologies, while the latter is relatively more concentrated on labor intensive industries contributing to employment generation.

Jai S. Mah


Intellectual property right (IPR) negotiations during the Uruguay Round (UR) negotiations were characterized by significant disagreement between developed and developing countries. For developing countries, the WTO system might have gone too far on patents. It is particularly true for essential medicines critical to human life and health. The Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) of the WTO includes a few provisions on special and differential treatment (SDT) of developing countries. However, these do not specifically mention pharmaceutical products. Patentability of pharmaceutical products may be analysed in light of fairness. From the viewpoint of distributional fairness, this article derives several policy suggestions for pharmaceutical products in fair international economic relations.

Ga Hyung Kim and Jai S. Mah


The automobile industry developed very rapidly in Korea from the mid-1970s onwards. In the early stage of its development, it used both foreign direct investment (FDI) inflows and technology licensing contracts to utilize advanced foreign technologies. The government mainly preferred technology licensing to FDI inflows to gain access to production technologies. A specific case of FDI is displayed in the joint venture between General Motors and Daewoo Motors. Although there were several improvements and assistances provided to the latter, its performance was relatively unsatisfactory. In contrast, Hyundai Motors relied on technology licensing, which turned out to be successful. Korea’s experience of technology acquisition in the automobile industry shows that for a developing country considering development of its own automobile industry, it would be beneficial to utilize technology licensing rather than FDI inflows.