IDEAS home Printed from https://ideas.repec.org/a/wsi/rpbfmp/v02y1999i03ns0219091599000151.html
   My bibliography  Save this article

Financial Reforms and Financial Crisis: The Korean Case

Author

Listed:
  • Junggun Oh

    (The Bank of Korea, Seoul 100-794, Korea)

  • Donghyun Park

    (Nanyang Business School, Nanyang Technological University, Singapore)

Abstract

We assess the role of financial reforms and liberalization in Korea's financial crisis, which erupted in late 1997. We first examine financial reforms carried out since the early 1980s and their effects on corporate financing as well as on the current account. We then analyze policy issues associated with the current financial crisis. Our main conclusion is that the crisis is due in no small measure to the unbalanced nature of Korea's financial reforms — extensive external liberalization combined with inadequate internal liberalization. The massive inflow of foreign capital associated with external liberalization exacerbated the over-investment problem that already existed in the 1970s. The inefficiencies of Korea's manufacturing corporations and financial institutions mutually reinforced each other, producing a vicious cycle of ever lower productivity of capital. The key to Korea's recovery thus lies in successful restructuring of both its financial and corporate sectors.

Suggested Citation

  • Junggun Oh & Donghyun Park, 1999. "Financial Reforms and Financial Crisis: The Korean Case," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 265-284.
    • Handle: RePEc:wsi:rpbfmp:v:02:y:1999:i:03:n:s0219091599000151
    DOI: 10.1142/S0219091599000151
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0219091599000151
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0219091599000151?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yanzhi Wang & Sheng-Syan Chen & Yen-Ting Cheng, 2011. "Revisiting corporate dividends and seasoned equity issues," Review of Quantitative Finance and Accounting, Springer, vol. 36(1), pages 133-151, January.
    2. Banker, Rajiv D. & Chang, Hsihui & Lee, Seok-Young, 2010. "Differential impact of Korean banking system reforms on bank productivity," Journal of Banking & Finance, Elsevier, vol. 34(7), pages 1450-1460, July.

    More about this item

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:rpbfmp:v:02:y:1999:i:03:n:s0219091599000151. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/rpbfmp/rpbfmp.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.