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Chaebol, Financial Liberalization, and Economic Crisis: Transformation of Quasi-Internal Organization in Korea

Author

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  • Chung H Lee

    () (Department of Economics, University of Hawaii at Manoa)

  • Keun Lee
  • Kangkoo Lee

Abstract

This paper argues that the Korean governmentís policy with regard to financial deregulation and liberalization was endogenously determined, being largely influenced by the interest politics of perhaps the most powerful interest group in Korea, chaebol. It also argues that the cause of Koreaís financial crisis of 1997-98 cannot be analyzed without first examining the influence of chaebol on the post-1993 financial liberalization, which planted the seeds of the crisis. The paper concludes that financial liberalization undertaken in a haphazard manner, manipulated by a few dominant players in the economy runs into the danger of producing an outcome worse than before.

Suggested Citation

  • Chung H Lee & Keun Lee & Kangkoo Lee, 2000. "Chaebol, Financial Liberalization, and Economic Crisis: Transformation of Quasi-Internal Organization in Korea," Working Papers 200004, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:200004
    as

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    File URL: http://www.economics.hawaii.edu/research/workingpapers/004.pdf
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    References listed on IDEAS

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    1. Chang, Ha-Joon, 1998. "Korea: The misunderstood crisis," World Development, Elsevier, vol. 26(8), pages 1555-1561, August.
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    Cited by:

    1. Thomas D. Willett & Nancy Neiman Auerbach, 2002. "The Political Economy of Perverse Financial Liberalization: Examples from the Asian Crisis," Claremont Colleges Working Papers 2002-26, Claremont Colleges.
    2. Kim, Joon-Kyung & Lee, Chung H., 2001. "Insolvency in the Corporate Sector and Financial Crisis in Korea," EIJS Working Paper Series 122, Stockholm School of Economics, The European Institute of Japanese Studies.
    3. Tarun Khanna & Yishay Yafeh, 2007. "Business Groups in Emerging Markets: Paragons or Parasites?," Journal of Economic Literature, American Economic Association, vol. 45(2), pages 331-372, June.

    More about this item

    Keywords

    Financial liberalization; The Asian crisis; Chaebol; Government intervention;

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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