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"How do you account for the success of Korea’s chaebol What problems did the chaebol face in the Asian financial crisis of the late 1990s"
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formance of chaebols and it is regarded that Korean economy became able to recover from the financial crisis of late 1990s due to the efficient performance and adequate restructuring of chaebols (Buzo, 2002, p187). At present, chaebols are successfully operating in South Korea significantly contributing towards the economic development (Choe and Chinmay, 2007, p232).
The essay aims to discuss the performance of Korean Chaebols after the financial crisis that hit Korea along with many other Asian countries in late 1990s. The essay examines the recovery path adopted by the Korean Chaebols to identify the factors that have contributed towards re-stability of these conglomerates after the financial crisis. It is revealed that financial crisis draw devastating impact upon the performance and growth of Chaebols however, they recovered from the crisis within few years with the help of government support and adequate business strategies and planning.
Chaebols are the South Korean business conglomerates that have attained strong position at international level and own several multinational enterprises. There are several dozen Chaebols working in Korea that are mainly operated by Korean family controlled corporate groups (Fields, 1995, p35). These Chaebols enjoy government support as well as finance that allow them evolving as well known international brands. Some of the well known Chaebols operating in South Korea include Samsung, LG and Hyundai etc. Traditionally Chaebols have played a very important role in economic as well as political progression of Korea. Chaebols have significantly contributed towards the development of new industries, markets and expansion of trade relation at international level (Kim, 1991, p272). It has been widely accepted that Chaebols have well supported Korean economy in attaining the position of East Asian Tiger (Rowley et al, 2001, p21).
Chaebols use to play dominating role in the economy of Korea because these entities remain the focus of
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Immediately after the crisis, the international monetary fund assigned the primary responsibility of the crisis to East Asian capitalism, particularly its financial markets. The primary strategy by IMF for the countries hit hardest like Korea, Indonesia and Thailand overhauled the financial system in East Asia (Hopkins 2006, p.
The cycle of excessive lending practiced in East Asia, during the late 1990s, was exaggerated by implied or unambiguous agreements between lenders and debtors, along with weak administration of financial regulations and concerns among the banking sector.
Asian entrepreneurs and political leaders received lauding for their economic decision to cooperate with the European and American financial institutions in order to restructure their economies in the worldwide market. The growth of the emerging market economies was so rapid that they were seen as market models.
A financial market is a place - an actual location such as a stock exchange building or a virtual location such as in a computer - where buyers and sellers agree to buy and sell financial instruments such as stocks, bonds, or derivatives in order to borrow, lend or invest funds for commercial purposes and in a manner that puts financial resources to best use.
Foreign Debt to Gross Domestic Product (GDP) ratio rose by almost 60%.
ASEAN consisted of Indonesia, Malaysia, Singapore, Philippines, Thailand, Brunei, Vietnam, Myanmar, Laos and Cambodia. It was formed to ensure sovereignty. It was nothing like European Union.
crisis was triggered by the decision of Thailand to float the baht after exhaustive efforts of the government of the country to support the currency failed. Note that the severe over-extension of the value of the baht was caused by the sudden dive in the real-estate business of
Han River," the "Small Dragon," and the "Second Japan." Despite a lack of natural resources, South Korea has bounded into the world market and emerged as one of the worlds newest, most dynamic economic powers--not to mention the worlds 15th richest nation. Korea exports more
Chaebol are large South Korean conglomerates. These firms are family – controlled and they enjoy strong bond with the government. Though family controlled businesses existed in Korea before 1961, the particular model of government – chaebol alliance was