Chaebols and Firm Dynamics in Korea

33 Pages Posted: 30 Jul 2019

See all articles by Philippe Aghion

Philippe Aghion

College de France and London School of Economics and Political Science, Fellow; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Sergei Guriev

Sciences Po; Centre for Economic Policy Research (CEPR)

Kangchul Jo

Department of Economics, London School of Economics & Political Science (LSE)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2019

Abstract

We study firm dynamics in Korea before and after the 1997-98 Asian crisis and pro-competitive reforms that reduced the dominance of chaebols. We find that in industries that were dominated by chaebols before the crisis, labor productivity and TFP of non-chaebol firms increased markedly after the reforms (relative to other industries). Furthermore, entry of non-chaebol firms increased significantly in all industries after the reform. Finally, after the crisis, the non-chaebol firms also significantly increased their patenting activity (relative to non-chaebol firms). These results are in line with a neo-Schumpeterian view of transition from a growth model based on investment in existing technologies to an innovation-based model.

Keywords: Asian crisis, chaebols, Schumpeterian Growth

JEL Classification: L25, O43

Suggested Citation

Aghion, Philippe and Guriev, Sergei and Jo, Kangchul, Chaebols and Firm Dynamics in Korea (June 2019). CEPR Discussion Paper No. DP13825. Available at SSRN: https://ssrn.com/abstract=3428346

Philippe Aghion (Contact Author)

College de France and London School of Economics and Political Science, Fellow ( email )

London
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Sergei Guriev

Sciences Po ( email )

27 rue Saint-Guillaume
Paris Cedex 07, 75337
France

HOME PAGE: http://econ.sciences-po.fr/staff/sergei-guriev

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Kangchul Jo

Department of Economics, London School of Economics & Political Science (LSE) ( email )

London School of Economics and Political Science
Houghton Street
London, WC2A 2AE
United Kingdom

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