Does regionalism matter? Local politics and foreign direct investment in South Korea

Abstract

Purpose The purpose of this paper is to examine how political/authoritarian regionalism affects foreign direct investment (FDI) in sub-national states in South Korea. Design/methodology/approach This paper employs statistical analysis to examine the relationship between regionalism and FDI, along with historical description of regionalism in South Korea. Findings The analyses suggest that not only authoritarian regionalism influence foreign investment to the region but also political regionalism matters. Sub-national states with higher authoritarian regionalism receive less foreign investment while sub-national states with high political regionalism, which imply political stability, receive more FDI than others. Originality/value The paper examined how local politics influence foreign investments in South Korea, and suggests stronger decentralization will positively influence FDI in the future.