Reciprocal Relations between Official Development Assistance Recipient and Donor Countries: Case of South Korean Overseas Construction Business and Southeast Asian Countries’ Economy

Abstract

Abstract:In developing countries, official development assistance (ODA) is generally perceived to be an alternative means to develop infrastructure. Donor countries may expect benefits such as increased construction project orders in recipient countries. However, it remains arguable whether ODA contributes to reciprocal relations between recipient and donor countries. The case of South Korea can provide empirical data given that its government has expanded the amount of ODA to encourage overseas construction business while supporting Southeast Asian countries. In this research, gross national income (GNI), gross domestic product (GDP), foreign direct investment (FDI), and construction project orders awarded by South Korean construction companies in Vietnam, Bangladesh and Sri Lanka are analyzed according to the variation of ODA awarded by South Korea. The analysis results show that the influence of ODA upon economic situation of recipient countries varies according to their economic volume and development policy. From the donor country's perspective, enhanced performance of construction business can be expected by means of cooperation with local construction business.

Critical Success Factors for Sustainable Construction Project Management

“…1-Project's Location [6][7][8] 2-Project's Size [8,9] 3-Clear and realistic goals/objectives [10,11] 4-Project's adequate funds/resources [12][13][14] 5-Effective procurement and tendering methods [15][16][17][18][19] II. Business-and Work-Environment-Related Factors 6-Economical environment [20,21] 7-Social environment [22][23][24] 8-Political environment [9,16,25] 9-Statutory approvals environment [26,27] III. Client-Related Factors 10-Influence of client/client's representative [25,28] 11-Client's experience in construction field [16,25] 12-Mechanism of financial payments [26,29,30]…”

The impact of official development aid flows on business internationalisation

“…This highlights the coordination between the public and private sectors (Reiffenstein & Nguyen, 2011). Furthermore, the synergies between aid financed pro- (Lee et al, 2017;Lundsgaarde et al, 2007). These schemes, which include aid-for-trade instruments, have a positive impact not only on enterprises in recipient countries, but also on these countries as a whole.…”

“…Furthermore, the synergies between aid financed projects and private firms' initiatives (e.g., corporate social responsibility activities) help the development of state–business networks that play a relevant role in the achievement of development objectives (Sial & Doucette, 2020). Anyhow, the impact of bilateral aid flows on the internationalisation and economic performance of firms from donor countries is not always straightforward (Díaz‐Cuellar & Francescone, 2016; White, 2020); cooperation with local business arises as a key factor to enhance foreign firms' economic performance in some industries—that is, construction—(Lee et al, 2017).…”

“…Aid in form of technical and financial assistance can not only enhance the technical capabilities of recipients' firms, but also the technical skills of local institutions to provide financial resources (e.g., subsidised loans and credit guarantees) to local SMEs. A relevant positive impact on the internationalisation of firms from recipient countries takes place when bilateral aid schemes include clauses that provide market access for recipient countries' exports (Lee et al, 2017; Lundsgaarde et al, 2007). These schemes, which include aid‐for‐trade instruments, have a positive impact not only on enterprises in recipient countries, but also on these countries as a whole.…”