Large South Korean corporations’ overseas direct investment (ODI) increased for the second consecutive quarter with their domestic investment showing a significant decrease due to slow deregulation in the nation.
According to the Ministry of Strategy & Finance, ODI showed the highest growth in six quarters in the third quarter of this year. Specifically, ODI totaled US$13.11 billion during the period, up 33% from a year ago. For reference, the investment, which rose 61.4% year on year in Q1 of 2017, fell in Q4 of 2017 and Q1 of 2018 but rebounded in the following quarter.
The ODI from the manufacturing sector jumped 160.6% to US$5.03 billion. In April this year, LG Electronics announced that it would sign a contract with ZKW, an Austrian vehicle lighting manufacturer, to acquire 70% of its shares for US$770 million euros.
The ODI from the financial and insurance sector added up to US$3.88 billion, down 9.7% from a year earlier. It was followed by real estate (US$1.52 billion) and information and communications (US$550 million).
By investment destination, the direct investment in the United States increased 77% to US$3.74 billion, led by a series of M&A contracts in the sectors including pharmaceutical. That in China jumped 107.2% to US$1.48 billion and that in Austria skyrocketed from US$20 million or so to US$1.23 billion. That in Asia added up to US$4.41 billion, followed by North America (US$3.82 billion) and Europe (US$3.3 billion).