IDEAS home Printed from https://ideas.repec.org/a/spr/jecstr/v6y2017i1d10.1186_s40008-017-0085-8.html
   My bibliography  Save this article

Corporate financial structure of South Korea after Asian financial crisis: the chaebol experience

Author

Listed:
  • Jiyoung Kim

    (Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO))

Abstract

The chaebol, a South Korean form of business conglomerate, has been a key factor in the country’s economic growth. In this study, the chaebol sector is added to the asset–liability matrix derived from a flow-of-funds analysis in order to explain the role of the chaebol in the Korean financial system. We find that the power-of-dispersion indices in the asset-oriented system differ between the chaebol and other private corporations. Between 1987 and 2002, the former has increased while the latter has declined. In the case of the chaebol, excess liabilities were reduced, while investments in financial assets were increased. This tendency led to an increase in the power-of-dispersion index in this asset-oriented system. Our previous research found a decrease in this index for the private sector in Korea. However, the index increased for chaebol when the private sector is divided into the chaebol and small-/medium-sized corporations in this paper. These results point to a greater concentration of economic power in the chaebol in the Korean financial market.

Suggested Citation

  • Jiyoung Kim, 2017. "Corporate financial structure of South Korea after Asian financial crisis: the chaebol experience," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-14, December.
    • Handle: RePEc:spr:jecstr:v:6:y:2017:i:1:d:10.1186_s40008-017-0085-8
    DOI: 10.1186/s40008-017-0085-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s40008-017-0085-8
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1186/s40008-017-0085-8?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
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Anne O. Krueger & Jungho Yoo, 2002. "Chaebol Capitalism and the Currency-Financial Crisis in Korea," NBER Chapters, in: Preventing Currency Crises in Emerging Markets, pages 601-662, National Bureau of Economic Research, Inc.
    3. Kim, Jiyoung, 2016. "Inter-industry analysis and monetary policy evaluations in the Korean flow of funds accounts," IDE Discussion Papers 619, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Kazusuke Tsujimura & Masako Mizoshita, 2003. "Asset-Liability-Matrix Analysis Derived from the Flow-of-Funds Accounts: The Bank of Japan's Quantitative Monetary Policy Examined," Economic Systems Research, Taylor & Francis Journals, vol. 15(1), pages 51-67, March.
    5. Morris A. Copeland, 1952. "A Study of Moneyflows in the United States," NBER Books, National Bureau of Economic Research, Inc, number cope52-1.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Bayari, Celal, 2020. "South Korean Economy and the Free Trade Agreement with China," MPRA Paper 102938, University Library of Munich, Germany, revised 21 Jun 2020.
    2. Oh, Hyunjin & Chung, Chune Young & Fard, Amirhossein, 2023. "Tacit vigilance in an emerging economy: An institution-based perspective of passive blockholder monitoring," Research in International Business and Finance, Elsevier, vol. 64(C).
    3. Githinji Njenga & Josphat Machagua & Samwel Gachanja, 2022. "Capital markets in sub-Saharan Africa," WIDER Working Paper Series wp-2022-112, World Institute for Development Economic Research (UNU-WIDER).
    4. Burkowski, Erika & Kim, Jiyoung, 2018. "Flow-of-funds analysis in the Brazilian economy (2004–2014)," IDE Discussion Papers 696, Institute of Developing Economies, Japan External Trade Organization(JETRO).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiyoung Kim, 2017. "Inter-industry analysis in the Korean flow-of-funds accounts," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-27, December.
    2. Riccardo De Bonis & Matteo Piazza, 2021. "A silent revolution. How central bank statistics have changed in the last 25 years," PSL Quarterly Review, Economia civile, vol. 74(299), pages 347-371.
    3. repec:psl:moneta:2005:214 is not listed on IDEAS
    4. Antonio Fazio, 2005. "Franco Modigliani," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 249-261.
    5. Jo Michell, 2012. "The flow of funds," Chapters, in: Jan Toporowski & Jo Michell (ed.), Handbook of Critical Issues in Finance, chapter 18, pages i-ii, Edward Elgar Publishing.
    6. Malcolm Rutherford, 2001. "Institutional Economics: Then and Now," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 173-194, Summer.
    7. Jeon, Bang Nam, 2012. "From the 1997-98 Asian financial crisis to the 2008-09 global economic crisis: lessons from Korea’s experience," MPRA Paper 36469, University Library of Munich, Germany.
    8. repec:bap:eebook:02 is not listed on IDEAS
    9. Queralto, Albert, 2020. "A model of slow recoveries from financial crises," Journal of Monetary Economics, Elsevier, vol. 114(C), pages 1-25.
    10. 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.
    11. Eswar S. Prasad & Kenneth Rogoff & Shang-Jin Wei & M. Ayhan Kose, 2007. "Financial Globalization, Growth and Volatility in Developing Countries," NBER Chapters, in: Globalization and Poverty, pages 457-516, National Bureau of Economic Research, Inc.
    12. Driffield, Nigel & Pal, Sarmistha, 2006. "Do external funds yield lower returns?: Recent evidence from East Asian economies," Journal of Asian Economics, Elsevier, vol. 17(1), pages 171-188, February.
    13. 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.
    14. Bos, Frits, 2009. "The National Accounts as a Tool for Analysis and Policy; History, Economic Theory and Data Compilation Issues," MPRA Paper 23582, University Library of Munich, Germany.
    15. Antonio Fazio, 2005. "Franco Modigliani," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 249-261.
    16. Timothy Chue & David Cook, 2004. "Sudden Stops and Liability Dollarization: Evidence from East Asian Financial Intermediaries," Econometric Society 2004 Far Eastern Meetings 646, Econometric Society.
    17. Young Kyun Chang & Won-Yong Oh & Jee Hyun Park & Myoung Gyun Jang, 2017. "Exploring the Relationship Between Board Characteristics and CSR: Empirical Evidence from Korea," Journal of Business Ethics, Springer, vol. 140(2), pages 225-242, January.
    18. Rezaie, Mohsen, 2014. "General Theory of Money: A New Approach," MPRA Paper 60073, University Library of Munich, Germany.
    19. Simon Gilchrist & Jae W. Sim, 2007. "Investment during the Korean Financial Crisis: A Structural Econometric Analysis," NBER Working Papers 13315, National Bureau of Economic Research, Inc.
    20. Lance Taylor, 2008. "A foxy hedgehog: Wynne Godley and macroeconomic modelling," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 32(4), pages 639-663, July.
    21. Milton P. Reid & Stacey L. Schreft, 1993. "Credit aggregates from the flow of funds accounts," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 49-64.
    22. Satoru Hagino & Jiyoung Kim, 2021. "Compilation and analysis of international from-whom-to-whom financial stock table for Japan, Korea, the United States, and China," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-27, December.

    More about this item

    Keywords

    Flow-of-funds analysis; Asset–liability matrix; Financial conglomerates (chaebol);
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East

    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:spr:jecstr:v:6:y:2017:i:1:d:10.1186_s40008-017-0085-8. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.