Understanding Korean capitalism: Chaebols and their corporate governance

Chaebols, Korean big business conglomerates, have had a huge influence in the global economy and in Korean society and politics. Some stress the significant contribution chaebols have made to the unprecedented rapid development of the Korean economy, while others highlight their concomitant problems such as cronyism, corrupt relations with government, and economic concentration. Although such problems seem to have been reduced in recent years thanks to institutional pressures enacted by the Korean government after the financial crisis of 1997, the pending reforms of the chaebol system are still important issues that permeate political and economic debate in Korea. In what follows, we will explore the unique characteristics of the chaebols, their relations with government, and the virtues and vices of this Korean capitalist model that does not operate along the lines of its European and Anglo-American counterparts.