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While the origin of Korean Industrial Relations goes back 150 years when the country opened its seaports to foreign countries, it didn’t emerge as a field of study until 1950s when academics began to write books and papers on the Korean labor movement, labor laws, and labor economics. In this paper, we sketch this history and describe important events and people that contributed to the development of industrial relations in Korea. Korean industrial relations in the early 20th century were significantly distorted by the 35-year-Japanese colonial rule (1910–1945). After regaining its independence, the U.S. backed, growth-oriented, military-based, authoritarian Korean government followed suit and consistently suppressed organized labor until 1987. Finally, the 1987 Great Labor Offensive allowed the labor movement to flourish in a democratized society. Three groups were especially influential in the field of industrial relations in the early 1960s: labor activists, religious leaders, and university faculty. Since then, numerous scholars have published books and papers on Korean industrial relations, whose perspectives, goals, and processes are still being debated and argued. The Korean Industrial Relations Association (KIRA) was formed on March 25, 1990 and many other academic and practitioner associations have also come into being since then. The future of industrial relations as a field of study in Korea does not seem bright, however. Issues regarding organized labor are losing attention because of a steadily shrinking unionization rate, changing societal attitude toward labor unions, and the enactment of new and improved laws and regulations regarding employment relationships more broadly. Thus, we suggest that emerging issues such as contingent workers, works councils and tripartite partnership, conflict management, and human rights will be addressed by the field of industrial relations in Korea only if this field breaks with its traditional focus on union and union–management relations.

This paper examines the statistical relationship between outbound Foreign Direct Investment (FDI) and firm performance. We focus on how the link is influenced by sector-specific differences and geographical factors.

We compile a time-series cross-sectional dataset that includes financial variables and FDI activities of South Korean firms between 2005 and 2008 from the DART, a financial statement database. Then, we fit our data against the linear regression models that we designed to identify FDI-performance relationship in different subsamples. Our measurement of firm performance is specifically constructed to reflect excess returns in the stock market.

We found compelling differences in the degree of FDI-performance relationships across different industries. In manufacturing sectors, the flow of direct investment is more heavily associated with firm performances than accumulated stock of direct investment, and vice versa in the service sector. The impact of China factors toward performance aspects of Korea’s outbound FDI which also differs across sectors as well.

Although there have been extensive research efforts on this subject in general, our paper addresses an increasingly significant class of FDIs that have received relatively less attention, that is, direct investment originating from developing economies. Also, our analysis adds a sectoral dimension that contributes to more comprehensive understanding of a multinational-performance relationship.

The Hanbo (meaning Korean treasure) scandal or “Hanbogate” occurred on January 23, 1997, with the bankruptcy of Hanbo Iron and Steel Company, the second largest steel company and 14th largest conglomerate in South Korea, as its debt had accumulated to US$5.6 billion. Hanbo's bankruptcy triggered an investigation by the Public Prosecutor's Office that resulted in the imprisonment for 15 years of Hanbo's founder, Chung Tae-Soo, for bribing politicians and bankers to pressure banks to extend hugh bank loans to Hanbo. Nine other persons were also convicted including Chung's son, who was jailed for three years for bribery and embezzlement, and Kim Hyun-Chol, the second son of President Kim Young-Sam, who was sentenced to three years jail and fined US$1.5 million (New York Times, 1997).