Korea's Capital Market Promotion Policies: IPOs and Other Supplementary Policy Experiences

87 Pages Posted: 29 Dec 2012

See all articles by Woochan Kim

Woochan Kim

Korea University Business School; European Corporate Governance Institute (ECGI); Asian Institute of Corporate Governance (AICG)

Date Written: December 28, 2011

Abstract

There are two unique approaches or policy stances Korean government took in regards to the capital market. First, the Korean government was actively involved in promoting the capital market. The government, for example, gave tax incentives to encourage IPOs. It sometimes threatened to publicly admonish those that refused to go public. No stock exchange in a development country has ever experienced such government involvement. Combined with rapid economic growth, this interventionist approached allowed the Korean stock market to experience phenomenal growth over a short period of time. Second, the promotion of capital market had a number of objectives. One was to mobilize domestic capital for economic development. Another was to lowering firms’ debt-to-equity ratio. But, most interestingly, the Korean government wanted to popularize stock ownership, and thereby let ordinary Koreans to share the fruits of economic growth. People’s stock ownership plan was the most noteworthy example.

Keywords: capital market promotion, IPO, stock ownership plans, Korea

JEL Classification: N25, O16, O20, O53

Suggested Citation

Kim, Woochan, Korea's Capital Market Promotion Policies: IPOs and Other Supplementary Policy Experiences (December 28, 2011). Available at SSRN: https://ssrn.com/abstract=2194337 or http://dx.doi.org/10.2139/ssrn.2194337

Woochan Kim (Contact Author)

Korea University Business School ( email )

LG-POSCO Bldg #524
Anam-Dong, Seongbuk-Ku
Seoul, Seoul 136701
+822-3290-2816 (Phone)
+822-922-7220 (Fax)

HOME PAGE: http://biz.korea.ac.kr/professor/wckim

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Asian Institute of Corporate Governance (AICG) ( email )

1, 5-ga, Anam-dong
Sungbuk-gu
Seoul, 136-701
Korea, Republic of (South Korea)

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