Multinational Corporations and Governmental Policies: The Case Study of South Korea

• Thesis title in English: Multinational Corporations and Governmental Policies: The Case Study of South Korea
• Key words: Multinational corporations, Government policies, Globalization, South Korea
• English key words: Multinational corporations, Government policies, Globalization, South Korea
• Academic year of topic announcement: 2015/2016
• Thesis type: Bachelor's thesis
• Thesis language: angličtina
• Department: Institute of Economic Studies (23-IES)
• Supervisor: doc. PhDr. Julie Chytilová, Ph.D.
• Author: hidden - assigned by the advisor
• Date of registration: 16.06.2016
• Date of assignment: 16.06.2016

References

Core Bibliography

Abelson, Donald E. 2002. Do Think Tanks Matter? :Assessing the Impact of Public Policy Institutes. McGill-Queen's Press.
Jang Joon-Oh. 2002. "Political Corruption in Collusion with Business in Korea" Korean criminological review 2002.6, 89-132.
Korten, David C. 1996. When Corporations Rule the World. Kumarian Press.
Rodrik, Dani. 2012. The Globalization Paradox: Democracy and the Future of the World Economy. W. W. Norton & Company.
You Il, Lee, and Lee Kyung Tae. 2015. "Globalization in Korea : Economic Nationalism and Globalization in South Korea: A Critical Insight." Asian Perspective 39, no. 1: 125.
Westaway, Jennifer. 2012. "Globalization, Transnational Corporations and Human Rights – A New Paradigm." International Law Research 63-72.
유승훈(Yu Seun-Hun);남현정(Nam, Hyun-Jung). 2007. "한국 다국적 기업의 자본구조 결정요인 / Capital Structure Determinants of Korea Multinational Corporations." 대한경영학회지 no. 6: 2777
조석곤 ( Seok Gon Cho, ). 2010. "1970년 전후 제시된 한국경제발전론 비교 검토." (A Survey on Korean Economic Development Theories Suggested around 1970) 민주사회와 정책연구 17, no. 0: 281

Preliminary scope of work

Introduction

In my thesis, I’m going to examine the evidence of how the multinational corporations have affected the governmental policies in various ways, using South Korea as a case study.
In a democratic society, the government is assumed to set policies for the benefit of the population that elects the government. However, in reality multinational corporations can affect government policies to benefit themselves often at the expense of the welfare of the majority of population. For example, raising taxes has become more difficult with economic globalization. If a country raises its taxes on profits of corporations, there is a possibility that corporations leave the country and move to whichever country has the lowest tax rates. Also, multinational corporations may use their huge financial resources to lobby for lower taxes. As a consequence, the ordinary people may suffer from the lost tax revenue. One of the ways of multinational corporations affecting government policies is producing and disseminating information that is advantageous to them. Multinational corporations may fund think-tanks to design policies benefiting themselves, and own media outlets in order to advertise those policies.
As a concrete example of multinational corporations, consider Samsung, a dominating company of South Korea, where I am from. Samsung’s annual revenue is 13.83 percent of the South Korean GDP. Undoubtedly this company is affecting policies of the Korean government, and sometimes it looks to be overwhelming the government. In 2007, a lawyer named Kim Yong-Chul who used to work for Samsung exposed Samsung’s systematic illegal lobbying efforts across government officials and media executives.


Hypotheses

1. A major means of multinational corporations affecting government policies is by locating some of their production in foreign countries in the sense of globalization.

2. A major means of multinational corporations affecting government policies is by funding various think-tanks and media outlets in order to promote policies benefiting themselves.

3. In South Korea, large corporations were under the influence of the developmental authoritarian government until the 1990’s. Beginning in 1990’s, under the democratic government and following the trend of globalization, large corporations became multinational corporations investing in foreign countries and increasingly influencing government policies.


Methodology

First, quantitative methods will be used. Hypothesis 2 will try to build upon recent studies by Dani Rodrik (The globalization Paradox, 2012), focusing more on Korea’s situation. It will work with an existing dataset of foreign investment by large corporations over the year, foreign employment growth rate, and large firm’s composition of Korean GDP over the year. Multiple linear regression model will be used to check the hypothesis. Multinational corporations’ composition of Korean GDP (or economic annual growth of the firm) will be the dependent variable. Foreign investment by large corporations and foreign employment growth rate will be the independent variable in the model. If necessary, interpolation will be used on the control variables. Dataset will be provided from KOTRA(Korea Trade-Investment Promotion Agency) and KOSIS(Korean Statistical Information Service).
Second methodology for the rest of hypotheses is the narration of sequence of events demonstrating the evolution of the power relation between the government and the large corporations in South Korea. In particular, in the decades preceding 1990’s various events will be used to show that the government had a control of the large corporations and used those corporations for developmental objectives. From the 1990’s, various events will be used to show that the large corporations increasing invested in foreign countries, funded think-tanks and media outlets, and lobbied for policies benefiting themselves. I will search for any relevant data (e.g. the list and foundation years of corporation-funded think-tanks and media organizations) that support this narrative.






Outline
1. Introduction and motivation
2. Literature review
3. Theoretical argument
4. Large corporations and government policies in South Korea before 1990’s
5. Large corporations and government policies in South Korea since 1990’s
6. Summary and conclusion

Preliminary scope of work in English

Introduction
In my thesis, I’m going to examine the evidence of how the multinational corporations have affected the governmental policies in various ways, using South Korea as a case study.
In a democratic society, the government is assumed to set policies for the benefit of the population that elects the government. However, in reality multinational corporations can affect government policies to benefit themselves often at the expense of the welfare of the majority of population. For example, raising taxes has become more difficult with economic globalization. If a country raises its taxes on profits of corporations, there is a possibility that corporations leave the country and move to whichever country has the lowest tax rates. Also, multinational corporations may use their huge financial resources to lobby for lower taxes. As a consequence, the ordinary people may suffer from the lost tax revenue. One of the ways of multinational corporations affecting government policies is producing and disseminating information that is advantageous to them. Multinational corporations may fund think-tanks to design policies benefiting themselves, and own media outlets in order to advertise those policies.
As a concrete example of multinational corporations, consider Samsung, a dominating company of South Korea, where I am from. Samsung’s annual revenue is 13.83 percent of the South Korean GDP. Undoubtedly this company is affecting policies of the Korean government, and sometimes it looks to be overwhelming the government. In 2007, a lawyer named Kim Yong-Chul who used to work for Samsung exposed Samsung’s systematic illegal lobbying efforts across government officials and media executives.


Hypotheses

1. A major means of multinational corporations affecting government policies is by locating some of their production in foreign countries in the sense of globalization.

2. A major means of multinational corporations affecting government policies is by funding various think-tanks and media outlets in order to promote policies benefiting themselves.

3. In South Korea, large corporations were under the influence of the developmental authoritarian government until the 1990’s. Beginning in 1990’s, under the democratic government and following the trend of globalization, large corporations became multinational corporations investing in foreign countries and increasingly influencing government policies.


Methodology

First, quantitative methods will be used. Hypothesis 2 will try to build upon recent studies by Dani Rodrik (The globalization Paradox, 2012), focusing more on Korea’s situation. It will work with an existing dataset of foreign investment by large corporations over the year, foreign employment growth rate, and large firm’s composition of Korean GDP over the year. Multiple linear regression model will be used to check the hypothesis. Multinational corporations’ composition of Korean GDP (or economic annual growth of the firm) will be the dependent variable. Foreign investment by large corporations and foreign employment growth rate will be the independent variable in the model. If necessary, interpolation will be used on the control variables. Dataset will be provided from KOTRA(Korea Trade-Investment Promotion Agency) and KOSIS(Korean Statistical Information Service).
Second methodology for the rest of hypotheses is the narration of sequence of events demonstrating the evolution of the power relation between the government and the large corporations in South Korea. In particular, in the decades preceding 1990’s various events will be used to show that the government had a control of the large corporations and used those corporations for developmental objectives. From the 1990’s, various events will be used to show that the large corporations increasing invested in foreign countries, funded think-tanks and media outlets, and lobbied for policies benefiting themselves. I will search for any relevant data (e.g. the list and foundation years of corporation-funded think-tanks and media organizations) that support this narrative.






Outline
1. Introduction and motivation
2. Literature review
3. Theoretical argument
4. Large corporations and government policies in South Korea before 1990’s
5. Large corporations and government policies in South Korea since 1990’s
6. Summary and conclusion