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Market-led corporate restructuring in a state-led economy: a problem of transition

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Frame of Image public management of private risks. Although Korea’s government-business risk partnership had contributed to rapid
capital accumulation and impressive economic growth, the crisis made it clear that the old system, fraught with the risks of moral hazard and outright corruption, could not be sustained in a new economic environment characterized by liberalization and democratization. 1 The crisis also revealed
the inadequacy of the existing institutional infrastructure that had failed to impose discipline on the corporate sector and had, in effect, impeded the orderly exit of nonviable firms. No effective
market-oriented alternative had emerged to replace the state-led approach to corporate restructuring, the dominant feature of the industrial rationalization programs during the authoritarian era (1961 to 1987). As a result, in order to facilitate corporate restructuring in the post-crisis period, the institutional infrastructure formed around the government-business risk partnership had to be restructured as well. In fact, in post-crisis South Korea, the term “corporate restructuring” is often
used interchangeably with “structural reform in the corporate sector,” referring to wide-ranging institutional changes in corporate governance, corporate finance, market competition, and bankruptcy procedures. Although this semantic confusion is unfortunate, it highlights a crucial fact: South
Korean 2 firms have to take on the challenge of changing their business structure while the inst


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Title Market-led corporate restructuring in a state-led economy: a problem of transition
Similar Titles
Material Type Reports
Author(English)

Lim Wonhyuk

Author(Korean)

임원혁

Date 2001
Pages 10
Language English
File Type Documents
Original Format pdf
Subject Industry and Technology < Entrepreneurship
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