Crisis and Restructuring in East Asia : The Case of the Korean Chaebol and the Automotive Industry

This book criticizes the widespread view that the 1997 Asian crisis was due to 'crony capitalism' and puts the blame instead on misguided liberalization. It analyzes the case of Korea's business conglomerates, the chaebol, with particular attention to the car industry, to show how liberalization contributed to the crisis even at the level of the firm. It shows how those firms that had developed innovative capabilities survived the crisis much better than those that had merely expanded into markets opened up by liberalization. Cover......Page 1 Contents......Page 6 List of Figures......Page 9 List of Tables......Page 10 Acknowledgements......Page 13 List of Abbreviations......Page 15 1.1 East Asia's miracle and crash......Page 18 1.2 Crisis of the chaebol and the Korean economy......Page 20 1.3 Controversy over East Asia's industrial growth......Page 22 1.4 Controversy over the 1997 crisis in East Asia......Page 29 1.5 Business dynamics and theory of the firm......Page 32 1.6 Existing studies of Korean carmakers and the industry......Page 37 1.7 Structure of the book......Page 39 2 The Asian Crisis in 1997 and its Causes......Page 42 2.1 Structural inefficiency of East Asian capitalism......Page 43 2.2 Role of panic and financial liberalization......Page 47 2.3 Conclusion......Page 58 3 Korea's Economic Institutions and the Crisis......Page 60 3.1 Developmental state, banks and the chaebol......Page 61 3.2 Democratization, liberalization and globalization......Page 69 3.3 Liberalization and laissez-faire......Page 72 3.4 International capital movement and the financial crisis in Korea......Page 78 3.5 Conclusion......Page 89 4 The Chaebol's Corporate Governance and the Crisis......Page 91 4.1 The chaebol's predominance and the crisis......Page 92 4.2 Concentrated ownership and control of the chaebol......Page 96 4.3 Aspects of corporate governance......Page 100 4.4 Corporate governance and product market pressure......Page 106 4.5 Conclusion......Page 108 5 Korea's Automotive Industry: The 1960s–90s......Page 109 5.1 The developmental state and the automotive industry: the 1960s–1980s......Page 110 5.2 Deregulation and industrial expansion in the 1990s......Page 116 5.3 Financial crisis and industrial crisis......Page 119 5.4 Conclusion......Page 124 6 Hyundai Motor Company......Page 126 6.1 Hyundai Group and Hyundai Motor Company......Page 127 6.2 HMC's strategies and vision......Page 130 6.3 HMC's efforts to develop technological capability......Page 137 6.4 HMC during and after the 1997 crisis......Page 145 6.5 Conclusion......Page 149 7 Daewoo's Global Management......Page 151 7.1 Daewoo Group and Daewoo Motor Company......Page 152 7.2 Legacies of GM dependency: 1972–92......Page 154 7.3 Daewoo Group's 'global management' strategy in the 1990s......Page 162 7.4 Daewoo's global expansion of automotive business......Page 169 7.5 Domestic and overseas operations compared......Page 176 7.6 The financial crisis and Daewoo's collapse......Page 180 7.7 Conclusion......Page 185 8 Comparison of Hyundai and Daewoo in Research and Development......Page 187 8.1 Different approaches to car development......Page 188 8.2 Comparison of car development capabilities......Page 194 8.3 Differences in engine development......Page 197 8.4 Different approaches to organizational structure......Page 201 8.5 Differences in company-wide coordination for car development......Page 209 8.6 Conclusion......Page 213 9 The Chaebol's Diversification: Ssangyong and Samsung......Page 215 9.1 Diversification of the chaebol, past and present......Page 217 9.2 Case one: the Ssangyong Motor Company......Page 220 9.3 Case two: the Samsung Motor Company......Page 224 9.4 Conclusion......Page 230 10.1 Bubbles, crashes and laissez-faire......Page 232 10.2 Moral hazard, market competition, and late industrialization......Page 233 10.3 Business dynamics, industrial development, and organizational change......Page 234 10.5 Benefits and risks of the reform......Page 236 10.6 Changes in business dynamics and industrial development......Page 238 10.7 Increasing private debts and property market bubbles......Page 240 10.8 Never-ending history......Page 241 Notes......Page 242 References......Page 259 B......Page 274 C......Page 276 D......Page 282 E......Page 285 F......Page 287 G......Page 289 H......Page 290 I......Page 292 K......Page 294 L......Page 297 M......Page 298 N......Page 300 P......Page 301 R......Page 303 S......Page 305 T......Page 307 W......Page 309 Z......Page 310 "This book criticizes the widespread view that the 1997 Asian crisis was due to 'crony capitalism' and puts the blame instead on misguided liberalization. It analyses the case of Korea's business conglomerates, the chaebol, with particular attention to the car industry to show how liberalization contributed to the crisis - even at the firm level. It shows how those firms that had developed innovative capabilities survived the crisis much better than those that had merely expanded into markets opened up by liberalization."--BOOK JACKET. This book criticizes the widespread view that the 1997 Asian crisis was due to "crony capitalism" and puts the blame instead on misguided liberalization. It analyzes the case of Korea's business conglomerates, the chaebol, with particular attention to the car industry to show how liberalization contributed to the crisis even at the firm level. It shows how those firms that had developed innovative capabilities survived the crisis much better than those that had merely expanded into markets opened up by liberalization Seung-il Jeong. Includes Bibliographical References (p. 242-256) And Index.