  Considering the growing significance of Eurasian economic ties because of
South Korea s New Northern Policy and Russia s New Eastern Policy, this study
investigates the motivations and locational factors of South Korean foreign
direct investment (FDI) in three countries in the Commonwealth of Independent
States (CIS: Kazakhstan, Russia, and Uzbekistan) by employing panel analysis
(pooled ordinary least squares (OLS), fixed effects, random effects) using data
from 1993 to 2017. The results show the positive and significant coefficients
of GDP, resource endowments, and inflation. Unlike conventional South Korean
outward FDI, labour-seeking is not defined as a primary purpose. Exchange
rates, political rights, and civil liberties are identified as insignificant.
The authors conclude that South Korean FDI in Kazakhstan, Russia, and
Uzbekistan is associated with market-seeking (particularly in Kazakhstan and
Russia) and natural resource-seeking, especially the former. From a policy
perspective, our empirical evidence suggests that these countries host
governments could implement mechanisms to facilitate the movement of goods
across regions and countries to increase the attractiveness of small local
markets. The South Korean government could develop financial support and risk
sharing programmes to enhance natural resource-seeking investments and mutual
exchange programmes to overcome the red syndrome complex in South Korean
society.
