This study analyzes the current state of public corporations in Korea, and makes suggestions for their improvement, including recommendations on how the Korean government may introduce and use the national holding company system to ensure the success of its heavy and chemical industrialization (HCI) drive policy.
Numerous states worldwide are making active and wide-ranging use of national holding companies, while the importance of public corporation continues to grow. This study therefore surveys the current state, problems, and future aims of public corporations in Korea, and suggests possible uses for national holding companies.
Prior to 1962, public corporations in Korea were almost completely owned and controlled by the government as major channels of government investment, and therefore treated as akin to public agencies and institutes. As the Korean economy began its rapid growth in 1962, the government reorganized and reformed these public corporations, in line with its economic development policy. The corporations were divided into three groups: government-invested institutes, public corporations, and privatized public corporations. These three types together accounted for 23.8 percent of the gross domestic product (GDP), 29.8 percent of the gross output, and 10.9 percent of total employee compensation in Korea as of 1972.
Although public corporations exert sizable influence on the growth of the Korean economy, they also lead to a number of significant problems. The fact that these corporations are public already entails that these corporations are prone to not only internal management problems, but also problems associated with being agents of governmental influence, and with government investment in general. Public corporations in Korea also tend to possess complex governance structures, reflecting the complexity of public projects they execute. They also differ from other public agencies in remuneration structure, and are plagued with high turnover rates among employees, all of which add to the difficulty of undertaking government projects in a sustained manner.
Nevertheless, public corporations have a core role to play as national holding companies in the implementation of the HCI drive policy. The Korean government may intervene in the heavy and chemical industries via these public corporations, and ensure the growth of these industries into central building blocks of the burgeoning national economy. The government’s HCI drive plan also allows the active use of public corporations as national holding companies in these industries in ways that will not only stimulate those industries, but also contribute to the development of the national economy.
중화학 공업 추진을 위한 국가지주회사의 활용방안(Using national holding companies to promote the heavy and chemical industrialization (hci) drive)
|Series Title; No||연구보고서 / 제74-04권|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < General|
|Holding||KDI; KDI School|