THE SUB-NATIONAL DISTRIBUTION OF SOUTH KOREAN FOREIGN DIRECT INVESTMENT IN RUSSIA: A FOCUS ON THE RUSSIAN FAR EAST

Abstract

This paper investigates the Korean foreign direct investment (FDI) in the Russian Far East, a significant area to develop South Korea’s new northern policy and Russia’s pivot to the East policy. Unlike the insignificant influence of the Korean FDI on Russia’s economy as a whole, South Korea is one of the key economic partners in the Russian Far East. For the period 2015–2019, South Korea is the 4th largest investor in the Russian Far East. In 2019, 69.7% of the Korean investments in the Russian Far East concentrated on Primorsky Krai, which contradicts the general trend that the world investments in the Russian Far East are highly skewed in Sakhalin Oblast to participate in the gas and oil projects. The Korean FDI in the Russian Far East aims market seeking rather than resource seeking. Besides, due to the high entry barrier of “nine bridges”, there are limited numbers of companies in nine bridges-industries.