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Causes and Consequences of the Korean Financial Crisis

Author

Listed:
  • Dosoung Choi

    (College of Business Administration, Seoul National University, Seoul, Korea)

  • Frank C. Jen

    (School of Management, State University of New York at Buffalo, Buffalo, New York, USA)

  • H. Han Shin

    (School of Management, State University of New York at Buffalo, Buffalo, New York, USA)

Abstract

During the past decade, the profitability of Korean firms has declined significantly while their business risk has risen substantially. The deteriorating condition was largely due to excessive investments in manufacturing capacity that were financed mainly with short-term debt capital. The measures to restructure the system are summarized in two major thrusts: one, to reform corporate governance so that the business sector becomes more transparent and more value-enhancing; and two, to help develop long-term capital markets so that the domestic financial system becomes less vulnerable to external shocks.

Suggested Citation

  • Dosoung Choi & Frank C. Jen & H. Han Shin, 2000. "Causes and Consequences of the Korean Financial Crisis," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-26.
    • Handle: RePEc:wsi:rpbfmp:v:03:y:2000:i:01:n:s0219091500000029
    DOI: 10.1142/S0219091500000029
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    Citations

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    Cited by:

    1. Chang, James Jinho & Shin, Hyun-Han, 2007. "Family ownership and performance in Korean conglomerates," Pacific-Basin Finance Journal, Elsevier, vol. 15(4), pages 329-352, September.
    2. Jaimin Goh & Wonwook Choi & Jungeun Cho, 2016. "Changes in chaebol firms’ overinvestment after the Asian financial crisis: a long-term perspective," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(1), pages 75-111, March.
    3. Kim, Byungmo & Lee, Inmoo, 2003. "Agency problems and performance of Korean companies during the Asian financial crisis: Chaebol vs. non-chaebol firms," Pacific-Basin Finance Journal, Elsevier, vol. 11(3), pages 327-348, July.

    More about this item

    Keywords

    Asian Crisis; Corporate Governance; Korean Financial Crisis; Over-Investment; and Capital Markets Development;
    All these keywords.

    JEL classification:

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

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