Large Conglomerates' Capital Investment in Seoul Metropolitan Area to Boost GDP

Research findings show that if four LG Group subsidiaries, which are currently unable to invest due to new and expanded facility regulations in the Seoul metropolitan area, were to invest in the region over five years, South Korea's annual GDP would see an additional increase of 0.74%.

Dr. Kim Gun-soo (44), a researcher at the Gyeonggi Development Institute under Gyeonggi Province, presented a research report on the 16th titled "Ripple Effects of Allowing New and Expanded Facilities for 25 Advanced Industry Companies in the Seoul Metropolitan Area." The report stated that LG Chem, LG Electronics, LG Micron, and LG Innotek—four LG Group subsidiaries—would conduct new facility investments worth 3.5 trillion won in the Seoul metropolitan area from this year through 2010, resulting in annual sales increases of 2.8 trillion won, totaling 14 trillion won over five years.

Dr. Kim explained that the domestic production-inducing effect would reach 5.05 trillion won annually, totaling 25.2 trillion won over five years, which represents 0.74% of last year's GDP of 693.4 trillion won.

He also anticipated that indirect production effects stemming from the 3.5 trillion won in new facility investments and 14 trillion won increase in sales would amount to 7.7 trillion won, of which 2.9 trillion won would be generated in non-metropolitan areas.

Dr. Kim stated, "Relaxing regulations on new and expanded factory construction for advanced large enterprises in the Seoul metropolitan area not only promotes domestic investment and elevates national economic growth to the next level, but also serves as a positive factor for regional economies outside the metropolitan area."

Currently, large conglomerates planning investments in the Seoul metropolitan area include four LG Group subsidiaries, such as LG Electronics constructing an LCD TV line in Paju, and six other companies including Daedeok Electronics and Dongyang Gigajeon. The total investment scale planned by these companies reaches 3.6 trillion won.