Legitimate Social Purpose and South Korea’s Support for Entrepreneurial Finance Since the Asian Financial Crisis

There has been a marked rise in the breadth and depth of the South Korean state’s support of entrepreneurial finance since the Asian Financial Crisis. This article provides novel conceptual and empirically-grounded understanding of the phenomenon by answering two interconnected research questions: (1) does the government’s financial support of high-technology entrepreneurship in the Creative Economy Action Plan constitute continuity or change in the Korean state’s encouraging of entrepreneurial finance? and (2) what is motivating these efforts? Making use of interview data and policy document analysis, we argue that Creative Economy efforts represent continuity of entrepreneurial finance support, especially since the Asian Financial Crisis. In answering the second question, we argue that legitimate social purpose has propelled Post-Asian financial crisis South Korean policy-makers to strive to diversify the sources of economic activity and job creation away from chaebols while simultaneously embedding the chaebol in the growing entrepreneurial ecosystem. The legitimate social purposes have input legitimacy via fit with employment and diversification aims and output legitimacy gleaned from the perceived positive performance of the entrepreneurial ecosystem.