This study examined the current status of public companies in Korea and their roles in the national economy, with an aim to present policy recommendations for state-run companies.
In Korea, there are mainly two types of public companies: those run by the central government and those run by local governments. Depending on the level of government participation, the former consists of government companies, government investment institutes and their affiliates, and agencies financed by the government. From the 1980s, a number of public companies have been privatized as the market shifted toward the private sector. Nevertheless, it has been shown that public companies still account for large portions of the national economy.
It has been noted that following problems exist regarding public companies:
• Public companies with less priority or even unnecessary have been founded
• The investment decisions of public companies usually lack an elaborate investment efficiency analysis model
• There is no objective mechanism to hold a public company accountable for its management practices and performance
• Because of the monopolistic status of most public companies in the domestic market, even inefficient management can yield high profits
Furthermore, overregulation by the government has been cited as a problem, as the government executes a great deal of influence on the management of public companies.
Therefore, in order to improve the management of public companies, they should be privatized to the extent feasible. Also, the government should not intervene in the management of the privatized company as much as possible, so that the privatization can lead to profitable results. As for the public companies for which privatization is neither possible nor desirable, the government should review the management policy regarding these companies, and adopt a system to enhance the autonomy of the companies regarding their daily management. In addition, an incentive system should be adopted to promote competition within a public company.
한국의 공기업경영개선정책(Policy recommendation to better the public company management)
|Series Title; No||정책연구시리즈 / 91-26|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < Science/Technology|
|Holding||KDI; KDI School|