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Corporate governance and Chaebol reform in Korea

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  • Corporate governance and Chaebol reform in Korea
  • Hwang, Inhak; Seo, JungHwan
  • Seoul Journal of Economics


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Title Corporate governance and Chaebol reform in Korea
Similar Titles
Material Type Articles
Author(English)

Hwang, Inhak; Seo, JungHwan

Publisher

[Seoul]:Seoul Journal of Economics

Date 2000
Journal Title; Vol./Issue Seoul Journal of Economics:vol. 13(no. 3)
Pages 29
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Industry and Technology < Entrepreneurship
Holding Seoul National University

Abstract

A typical Chaebol consists of many diversified and legally independent affiliates, all of which are controlled by a controlling shareholder family. This paper characterizes the Chaebol governance structure as controlling shareholder managerialism to differentiate it from shareholder capitalism and stakeholderism. We examine the historical and institutional background that contributed to the persistence of the Chaebol governance structure despite the gradual dilution of ownership. By regression analysis about the top 30 Chaebol, we also find that the Chaebol ' pyramid control structure became to reveal its limitations around the early 1990s, and thus Chaebol governance should have been improved even before the financial crisis. But this finding could not justify the way in which the government has initiated the governance reform since the crisis. Since the major problem of Chaebol governance largely came from the lack of market disciplining mechanisms. the government should put more efforts in providing the appropriate environments where market mechanisms operate effectively.