This study examines the current status of the government-issued stocks of Pohang Iron and Steel co., Ltd (POSCO) and Korea Electric Power Cooperation (KEPCO), so as to analyze the economic effects of, and problems with, privatization, and to further policy implementation for the privatization of public enterprises government-issued stock.
The main purpose of public enterprise privatization in government-issued stock type is to provide individuals with low income the opportunities to develop their assets. During the distribution of government-issued stocks of POSCO in 1988, the government distributed 34.1 percent of government-issued stocks to 3.2 million people, and KRW 413.3 billion of the sale price was transferred to the special accounts for treasury loans and investments. Also, in 1989, KEPCO distributed 21 percent of government stock to 6.6 million people, and transferred KRW 1.272 trillion to special accounts. At that time, the government-issued stock transfer reduced the price index of stocks slightly. As a result, the stockholding population was expanded from urban middle- and high-income groups, to low-income groups. However, the operational earnings of POSCO were significantly reduced. Also in KEPCO, privatization had little effect on the improvement of management efficiency. In terms of capital gain of government-issued stockholders, POSCO lost KRW 1.062 trillion, and KEPCO’s capital gain was reduced by 75 percent. Consequently, their stock prices dropped and the asset values of government-issued stockholders also depreciated. After 1989, government strategy designed to build assets among the low-income groups was not implemented.
In order to improve the problems of privatization of government-issued stock type, the strategy for building the assets of low-income groups through government-issued stocks should be reexamined. Secondly, an indirect stockholding method should be implemented. Also, the stocks of high-performing public enterprises should be sold to common investors at the highest possible prices, through public sales, to establish the fund. The fund, then, should be used to develop the assets of low-income groups. Third, short-term profits must be sold immediately after the listing of stocks. Fourth, in selecting the public enterprises to be privatized, the public enterprises in the competition rather than the monopoly should be selected, or, the public enterprises that may enter competition with other private enterprises at the time of privatization should be selected. Fifth, an integrated index should be developed to detect trends in the stock market as a whole. Sixth, the participation of the government in stock markets should be improved. It is desirable to the possibility that the government participates in stock markets by the method that the subjects to purchase government-issued stocks are expanded to general populations and that stockholders hold the risk of stock transaction.
국민주방식 공기업 민영화의 경제적 효과분석(The analysis of economic effect of public enterprise privatization in government-issued stock type)
[서울] : 한국개발연구원
|Series Title; No||정책연구시리즈 / 92-17|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Economic Administration|
|Holding||KDI; KDI School|