Impact of Korean Multinational Corporations on Vietnam's Economic Growth

Park Park

Bachelor's thesis

Abstract:

The aim of this thesis is to examine the increase in trade and investment of South Korean multinational corporations in Vietnam and the positive effect of South Korean multinational corporations' investment on Vietnam's GDP, regional development, and employment. A case study method is used to determine the effect of foreign direct investment on employment, regional development. A case study analysis of the direct investment by the giant South Korean electronics manufacturing company Samsung in Vietnam reveals that it contributes immensely to employment in the country. The company has created at least 160,000 jobs across its six manufacturing factories and one research center located in Vietnam. Similarly, a case study of TKG Tae Kwang VINA revealed that direct investment by the company in Vietnam had created 70,000 jobs for Vietnamese citizens. Lotte Group has also created employment for 14,000 people in Vietnam. A case study of the development of Bac-Ninh province from an agriculture-based rural village to an industrial production base reveals the effect of South Korean foreign direct investment on Vietnam's regional development. Until June 2021, South Korean multinational corporations’ investment in the area stood at USD 10.7 billion. Regression analysis is employed to determine the impact of foreign direct inflows on the GDP of Vietnam. The regression analysis results revealed that there is a strong and positive relationship between foreign direct investment and GDP. An R statistic of 0.87051 indicates that the GDP expansion witnessed in Vietnam is partly contributed by foreign direct investment. A p-value (=0.0011) also supports the hypothesis that there is a positive association between Vietnam's GDP and South Korean foreign direct investment inflows.

Abstract:

The aim of this thesis is to examine the increase in trade and investment of South Korean multinational corporations in Vietnam and the positive effect of South Korean multinational corporations' investment on Vietnam's GDP, regional development, and employment. A case study method is used to determine the effect of foreign direct investment on employment, regional development. A case study analysis of the direct investment by the giant South Korean electronics manufacturing company Samsung in Vietnam reveals that it contributes immensely to employment in the country. The company has created at least 160,000 jobs across its six manufacturing factories and one research center located in Vietnam. Similarly, a case study of TKG Tae Kwang VINA revealed that direct investment by the company in Vietnam had created 70,000 jobs for Vietnamese citizens. Lotte Group has also created employment for 14,000 people in Vietnam. A case study of the development of Bac-Ninh province from an agriculture-based rural village to an industrial production base reveals the effect of South Korean foreign direct investment on Vietnam's regional development. Until June 2021, South Korean multinational corporations’ investment in the area stood at USD 10.7 billion. Regression analysis is employed to determine the impact of foreign direct inflows on the GDP of Vietnam. The regression analysis results revealed that there is a strong and positive relationship between foreign direct investment and GDP. An R statistic of 0.87051 indicates that the GDP expansion witnessed in Vietnam is partly contributed by foreign direct investment. A p-value (=0.0011) also supports the hypothesis that there is a positive association between Vietnam's GDP and South Korean foreign direct investment inflows.

Keywords

Economic growth, multinational, corporation, foreign direct investment, GDP.

Language used: English

Date on which the thesis was submitted / produced: 7. 4. 2022

Thesis defence

• Date of defence: 7. 6. 2022
• Supervisor: Ing. Přemysl Písař, Ph.D.
• Reader: Ing. Miroslav Halouzka, CSc.

University of Finance and Administration

Bachelor programme / field:
Economics and Management / Economics and Management