Industrial Conglomerates Research Articles

A Flight to Q?: Firm Investment and Financing in Korea Before and After the 1997 Financial Crisis

We examine investment behavior among exchange-listed Korean manufacturing firms before and after the 1997 financial crisis using firm-level panel data. We start with the standard Q-theory of investment, and then augment it by allowing for a sales accelerator and the possibility of cash constraints, categorizing firms based on their age, size and affiliation to the industrial conglomerates (i.e., chaebols). We find that Tobin's Q is a key and robust determinant of firm-level investment in a pooled sample for the period from 1992 to 2001, but that it became more important for small firms and less important for chaebol-affiliated firms after the crisis. Investment by chaebol firms also became more sensitive to the availability of internal cash balances after the crisis. We interpret this as reflecting a shift in the Korean economy to a stronger market orientation after the crisis and to a business climate in which the quality of potential projects became more important relative to capital market imperfections in determining the destination of investment funds.

Sub-continental transport mechanisms and pathways during two ozone episodes in northern Spain

Abstract. Two ozone episodes (occurring in June 2001 and June 2003) in the air quality monitoring network of the Basque Country (BC) are analyzed. The population information threshold was exceeded in many stations (urban, urban-background and rural). During this type of episodes, forced by a blocking anticyclone over the British Isles, ozone background concentrations over the area increase after the import of pollution from both, the continental Europe and the western Mediterranean areas (Gangoiti et al., 2002). For the present analysis, emphasis is made in the search for transport mechanisms, pathways and area sources contributing to the build-up of the episodes. Contributions from a selection of 17 urban and industrial conglomerates in the western European Atlantic (WEA) and the western Mediterranean (WM) are shown after the results of a coupled RAMS-HYPACT modelling system. Meteorological simulations are tested against both the high-resolution wind data recorded at the BC coastal area by a boundary layer wind-profiler radar (Alonso et al., 1998) and the wind soundings reported by the National Centres of Meteorology at a selection of European and north-African sites. Results show that during the accumulation phase of the episodes, background ozone concentrations increase in the whole territory as a consequence of transport from the Atlantic coast of France and the British Channel. For the peak phase, intrusions from new sources, located at the Western Mediterranean, Southern France, Ebro Valley, and, occasionally, the area of Madrid are added, resulting in a further increase in the ozone concentrations. Direct day and night transport within the north-easterly winds over the sea from the WEA source region, and night-time transport within the residual layer over continental areas (southern France, the Ebro Valley, and central Iberia) modulate the import sequence of pollutants and the local increase of ozone concentrations. The alternative direct use of low resolution meteorological data for the estimation of back-trajectories shows a more simple transport scheme with no contributions neither from the Western Mediterranean nor from the Madrid area.

Portugal

The evidence provided in this report shows that the Portuguese forest sector has been responsive to demands for its products, not only timber, but also cork and some other non wood forest goods and services. The area of forests almost tripled since the mid of the 1990s and the main cause of this has been that response to market conditions. Given the very high salience of private ownership, private forest owners played a major role in that response, even when there were no supported public policies, which was the case until the 1980s. Private forest owners obviously have not been alone in making up these adjustments to demand. Forest industries have been the essential connecting link between the forests and the final consumers, either in the domestic markets, or abroad. The first jump in expanding the forest resource base was the installation of the cork oak stands in the southern regions, mostly from the mid of the XIXth century until the mid of the XXth century. This was and still remains an export oriented business. It has successfully resisted the arrival of plastics, and is now facing new forms of competition from this material. Again this competition is meeting an active response from the industry and the forest owners, but a lot is still undecided about the end of this game. Pulp and paper is another story of creation of a new forest resource base and a new industry oriented essentially towards exports. Like in the case of cork, the quality of the product has been generally good, but here also new threats are arising. The resource base of the industry is under increasing risk of forest fires and the fundamentals of the Portuguese economy, in recent years, are not favouring exporting business. The wood based panel industry is another case where the forest resources built up by private forestry during the last one hundred years were able to trigger and sustain industrial conglomerates of large international scope. Nowadays the leading group in the world in this industry is Portuguese. The tree species at the base of this industry is maritime pine. This is the species which has been suffering most with forest fires and this is not good news for the industry. However, entrepreneurs here have been able to evolve towards other products and other markets. The rest of the forest industries (sawmilling, carpentry and furniture) are essentially made of small, even very small enterprises relying almost entirely on the domestic market. Rising real incomes and lower real interest rates, until the turn of the century helped these activities. These favourable conditions stopped to hold at the same time as the exposure to foreign competition became more intense. The strong dependence of these industries on the macroeconomic situation of the country is now pushing them towards improvements in labour productivity, at lower levels of employment.

Export‐led industrialisation and growth: Korea's economic miracle, 1962–1989

During 1962–1989, South Korea underwent a remarkable economic transformation from being poverty‐ridden to attaining the status of newly industrialised nation. This transformation was achieved through the adoption of an outward‐oriented, industry‐led strategy. It was based, particularly during the 1970s, upon the development of large‐scale industrial conglomerates and the attainment of economies of scale and technology to achieve international competitiveness. By the early 1980s, this strategy had resulted in major structural imbalances, a weakened financial sector, heavy concentration in domestic markets, and a repressed development of small and medium enterprises. By the end of the 1980s, despite attempts at economic reform, the structural and financial problems remained and became the country's undoing during the crisis of 1997–1998. This article reviews the question whether Korea's performance during this period can be described as an economic miracle. The empirical evidence is mixed and inconclusive, although the achievements of the Korean economy should not be underestimated.

A historical materialist account of the Chilean capital control: prototype policy for whom?

After the tumultuous 1990s, capital controls are making a comeback. Although about 14 emerging markets have implemented capital constraints, the Chilean variant (1991-8) has drawn the most attention. Many scholars and policymakers, especially of the Keynesian variant, are quick to support country-level capital controls as a useful device to quell further socio-economic devastation largely brought about by the speculative activities institutional investors. While this is an important concern, their analyses tend to treat capital controls as ready-made, technical policy instruments usually devoid of political and historical considerations. On the contrary, the Chilean case demonstrates that capital controls can form one moment of larger accumulation strategies from which a minority of the population benefits. By examining the Chilean control through the lens of historical materialism, this essay attempts not only to provide a more rigorous and critical scrutiny but also seeks to 'politicize' this seemingly neutral policy. In doing so, the essay suggests that the URR was not a means to an end, but rather an integral moment of a larger class-based strategy - paradoxically named 'growth with equity' - that was designed to stabilize and reproduce a development model, which serves the interests of powerful transnational financial capitals and industrial conglomerates.

Kirloskar Brothers Limited - A Leading Player in the World of Pumps

Kirlokar Brothers Limited (KBL) is a part of one of India's largest industrial conglomerates - the Kirloskar Group. Incorporated in 1920, KBL was a pioneer in the manufacture of agricultural equipment, diesel engines, electric motors, and centrifugal pumps in India. It formed the bedrock for the creation and expansion of the entire Kirloskar Group. Today, KBL still maintains its important position - it's the largest manufacturer and exporter of pumps in all India.

Toward a Multilateral Competition Policy Regime?

The multilateral economic system contains a major shortcoming. Although governments have committed themselves to a rule-based multilateral trade policy regime in the World Trade Organization (WTO), private companies that operate in the global marketplace face no such multilateral disciplines. Certainly, most industrialized nations have created their own set of antitrust laws. Furthermore, a series of well-functioning bilateral and regional mutual assistance agreements has been concluded both to facilitate competition enforcement in transnational cases and to avoid the drawbacks of the extraterritorial application of antitrust legislation. Still, on a multilateral level, it has been impossible to agree on a coherent framework for competition rules. Strangely, international competition policy has received attention only from a relatively small group of specialized antitrust practitioners. As a structural factor determining the margin of maneuver of internationally active private companies on the global market, the international dimension of competition policy deserves a higher place on the agenda of all those interested in international public policy and political economy. Competition Policy Competition or antitrust policy serves many purposes. [1] First, by preventing the economy from being dominated by a few large conglomerates, antitrust policy is a tool that ensures the plurality of economic and--ultimately--political life. Second, competition law is set up to protect consumers against abuses of market dominance and against price-increasing and choice-reducing agreements between companies. Third, weak or absent competition poses a problem for the efficiency of resource allocation in the economy. Fourth, competition policy helps to modernize the economy by stimulating companies to constantly innovate in light of the latest technological discoveries. Finally, the strict enforcement of competition policy helps to keep markets open for competitors, whether national or foreign. Today, more than eighty countries have enacted competition legislation, and another twenty countries are considering adopting antitrust laws. [2] Although I do not intend to provide an assessment of the current intellectual debates on antitrust policy, it might be useful to briefly introduce the most well-known examples of competition enforcement. [3] In the United States, antitrust law was already well established at the end of the nineteenth century as a tool to fight the formation of industrial conglomerates. [4] The Sherman Act of 1890--which still forms the basis of U.S. antitrust law--prohibits agreements in restraint of trade and monopolization, attempted monopolization, and conspiracies to monopolize. In 1914, Congress adopted the Clayton Act as a means to protect opportunities for small business. The act notably prohibits price discrimination and tie-in sales and exclusive dealing contracts. Furthermore, the Clayton Act forms the starting point of U.S. merger control. It prohibits acquisitions, mergers, or joint ventures that may substantially reduce competition. Convinced that the concentration of German industries in the 1930s had been an important element in the creation and persistence of Hitler's Nazi regime, the United States insisted after World War II on the establishment of a strict anticartel policy in the Federal Republic of Germany. Germany, in turn, proved instrumental in bringing the antitrust concept into the 1957 Treaty of Rome, which established the European Community (EC). [5] The EC treaty prohibits agreements or concerted practices between companies that may affect trade between the member states and restrict competition. Examples are agreements between companies intended to fix purchase or selling prices. A company's abuse of its dominant position is also prohibited. Large mergers may not be put into effect without EC approval and are prohibited if they create or strengthen a dominant position on the internal market or a substantial part of it. …

Financial contagion in East Asia and the origins of the economic and financial crisis in Korea

In this article the major elements of the 30 year old Asian development model are examined in the light of the financial crisis in the region. The notion of a common model is examined and found to be overstated. The monetary crisis in Asia has affected countries to different degrees, with Indonesia and Korea being particularly weakened. Korea has two major economic problems which can be traced to economic policies established in the 1960s. First, the industrial organization of the economy under a few industrial conglomerates, which has outlived its usefulness and is now a major source of the troubles in the economy. The conglomerates have been responsible for an investment policy where risk has been pushed to recklessness and the rate of return on capital employed is meagre. Second, banking policy, which is best characterized as a severe form of ‘moral hazard’. Both of these policies, while having played major parts in past economic successes, are now the main cause of a weakened economy in a globalized world.

The Ethic of Self-Reliance and the Spirit of Capitalism in Russia

Oleg Kharkhordin (1994) argues that most Russian industrialists adhere to a corporate ethic of mutual aid that facilitates the creation of financial and industrial conglomerates united in a national market. He also emphasizes that sustained capitalist development requires the rise of a new individualistic ethic of samostoyatel'nost', or self-reliance, which he finds growing among Russian businesspeople. Contrary to Kharkhordin's assertions, I demonstrate the persistence of collectivist sentiment among state enterprise directors on the basis of a 1994 Moscow-region survey. I then use survey data to show that in the adult Russian population as a whole, self-reliance was a much less popular norm in 1995 than it was in 1989. Finally, I analyse a 1995 survey of Russian adults in order to demonstrate that entrepreneurial Russians are not especially inclined to espouse the samostoyatel'nost' ethic. I conclude that certain social-structural continuities between the Soviet and post-Soviet periods partly account for the persistent weakness of the samostoyatel'nost' ethic among most Russians, including entrepreneurs. An ethic of self-reliance may be necessary for sustained capitalist growth in Russia, as Kharkhordin suggests, but so is a transformation of power relations more massive than has taken place to date.

El Tratado de Libre Comercio México-Estados Unidos y los problemas sociopolíticos actuales

El trabajo señala los problemas políticos más álgidos que el gobierno de México tuvo que sortear para la firma del TLCAN a comienzos de 1994 —eso es para realizar su esperanza de pertenecer al Primer Mundo mediante la integración a la economía norteamericana. Una evaluación sucinta del tema revela un balance negativo para México tanto en el campo económico como en el sociopolítico. Si el gobierno mexicano sigue insistiendo en que la salida de la crisis es solamente un asunto económico, demorará la urgente reforma política hacia la democracia en la que participen todas las fuerzas del país. El duro ajuste neoliberal —que sólo ha beneficiado a los grandes financieros, comerciantes e industriales nacionales e internacionales en una alianza estratégica—, dificulta mejorar las condiciones de vida de la gran mayoría de la población mexicana. Esta condición, que a su vez agudiza la situación del sistema político, tiende a encaminar al país a una situación de enfrentamiento y de ingobernabilidad.

The return of local autonomy: An analysis of South Korea's 1991 Local Elections

In 1991, South Koreans had their first opportunity to vote in local elections in over 30 years. At stake were 4,303 seats on 260 local councils in small cities, counties, townships, and municipal districts (nonpartisan elections) and 866 seats on councils in the nations's six large cities' and nine provinces (partisan elections). The return of local elections was seen by some political observers as a benchmark for measuring the degree to which the Republic of Korea had evolved into a more democratic society. In fact, for quite some time, a more decentralized governmental system, as measured by local autonomy, had been seen as an essential step in any transformation of South Korea into a democratic state (cf. Kim, Bun Woong, 1991; Ahn, Chung-Si, 1991; l i e and Aaugh, 1991; Lee, 1991). Korea is a nation with large and increasingly educated middle class. Its informed electorate is quite large. They understand the dynamics of Korean politics as well as several maxims of power that prevail. First, power resides in the national government, particularly in the president and in the chaebol (large industrial conglomerates). Second, family facilitate success and the ability to achieve position and power in the society. Nepotism is accepted as a cultural reality and it is not defined in any way as being improper or inappropriate. Third, ties are extremely important High school friendships and especially uni-

Industrial conglomerates, risk spreading and the transition in Russia

Industrial conglomerates, risk spreading and the transition in Russia

Phosphorus Removal in Constructed Wetlands Using Gravel and Industrial Waste Substrata

The phosphorus removal efficiency of three gravel based constructed wetland systems (CWSs) has been investigated in a two year study in which secondary sewage effluent was treated. The constructed wetlands systems, 100m × 4m × 0.5m with an impervious liner, comprised an unplanted gravel “control” trench and gravel trenches planted with monoculture stands of either Typhaorientalis or Schoenoplectusvalidus. Inlet and outlet phosphorus concentrations and vertical and linear profiles of phosphorus were determined to characterise immobilisation/translocation through the systems. Laboratory phosphorus adsorption experiments were conducted with regional gravels and alternative adsorptive media including industrial slag and ash by-products. Phosphorus adsorption in the large scale gravel systems was variable and ranged from −40% to 40%. Laboratory adsorption capacity studies conducted with the gravel substratum indicated that field adsorption potential could be successfully simulated and modelled. Ion exchange experiments have been used to evaluate gravel and industrial conglomerates, with a view to improving phosphorus immobilisation through substratum selection and effluent flow management. Langmuir and Freundlich isotherms characterised phosphorus adsorption and the maximum adsorption capacity of regional gravels ranged from 25.8 to 47.5 μg P/g compared to blast furnace slag 160 to 420 μg P/g and fly ash 260 μg P/g. These results indicate that further investigations into the inclusion of industrial waste substrata in a CWS are warranted.

The political economy of Indian joint industrial ventures abroad

Indian firms are moving abroad in increasing numbers to establish manufacturing plants with local partners in less-industrialized countries. As a result, India has become one of the few important sources of Third World technology. Indian foreign direct investment was the intended consequence of foreign trade policies designed to link exports with investment, and the unintended consequence of Indian regulatory policies designed to restrict the domestic growth of large-scale private enterprises. In addition, Indian overseas operations were aided by existing financial and technical collaboration agreements in India and by expanded collaboration overseas between transnational corporations and Indian private and public enterprises. These various factors have disproportionately affected the five to ten largest Indian industrial conglomerates that control the bulk of Indian joint ventures abroad. The experiences of these firms and of the Indian government in promoting their foreign investments have had important consequences for the domestic policy process in India and for Indian foreign policy.

Corporate Planning and the Holding Company

Daniel P. Kedzie, Ph.D., C.L.U., C.P.C.U., is Executive Vice President of Management Programs, Inc., a Glen Ellyn, Ill. based consultant firm. He was formerly Vice President and Executive Assistant to the President, CNA. Financial Corporation. This paper was presented at the A.R.I.A. 1968 Annual Meeting. ' Stanford Research Institute, Formal Planning -The Executive's Role (California: Stanford Research Institute, 1964), p. 3. Currier Jordan,2 there is a list of 373 corporations operating in the United States as insurance holding companies, or as financial complexes, industrial conglomerates or non-insurance parents which have insurance company subsidiaries. Significantly, Mr. Jordan states that approximately forty holding companies were formed or were planned in 1967. The first half of 1968 has witnessed a continuing interest in the holding company mechanism with such giants as the Insurance Company of North America and the Continental Insurance Companies getting into the act. Even the mutuals (Nationwide and Kemper, for example) are using the device. It is difficult indeed to avoid reading about an insurer that has not announced plans for the formation of a holding company.3 It is appropriate to say that this is the era of the holding company in the field of insurance. At this very moment, New York is preparing legislation that is expected to provide investment and operating flexibility to many more insurance companies that may want some of the major advantages of the holding company without having to form one. This legislation is expected to affect nrincinallv mutual life insurance