The Growth of Korean Companies and Their Contributions to the Miracle of the Han River

Abstract

Over the past six decades, the Korean economy has witnessed remarkable growth. In the 1950s, when the government was first established, Korea was the one of the poorest countries in the world. Now, it has grown as a global economic power with a solid industrial base. Korea’s economic success since then has been named “the Miracle of the Han River”. Along with the growth of the economy, there is an enormous contribution from Korean companies which probably started from small shops and have grown to become global giants. There are some studies about the Korean economy and Korean companies, especially Chaebols. These studies mainly focus on the relationship between value and ownership structure, and the gap between controlling power and cash flow ownership. However, there is a controversy over how the companies have contributed to the success of the Korean economy. These critical issues have attracted the attention of not only academic scholars but also policy makers. This study aims to present the outstanding post-war development of the Korean economy with a particular concentrate on the role played by Korean companies. First, the growth of Korea economy is reviewed. Second, we cover the growth of Korean firms, which have contributed remarkably to the national economic development. Third, we provide an overview of government policy and the external environment facing Korean firms, and discuss about the intervention of government in business activities that lead to industrialization. Fourth, we show how Korean businessmen have carried out business activities in conjunction with the government-directed economic policies. Findings from this study highlight many implications for the developing countries and their business sector.