The Rise of the Chaebol – A History

By Michael Chung

Park Chung Hee – an influential figure in the rise of the chaebol (Wikimedia Commons)

 

Etymologically, the term “chaebol” comes from the roots “chae,” meaning wealth, and “bol,” meaning clan or faction. Historically, however, the firms themselves are rooted in the Korean War and Japanese occupation.

With the end to both the war and foreign occupation in 1943 and ‘45, respectively, many Korean businessmen inherited the assets of Japanese firms operating in Korea. These new, and now Korean, businesses went on to flourish during the 1940s and ‘50s. Allegedly, however, several of these firms had received special government favors in exchange for kickbacks during Rhee Syng Man’s First Republic. Thus, when military leaders, led by Park Chung Hee, overthrew the government in 1961, they pledged to eradicate the crime and exploitation associated with Rhee’s administration.

Chaebol Or Bust — But At What Cost?

By Michael Chung

It’s chaebol or bust for many recent college graduates (image courtesy of saramin.co.kr)

Competition in Korea is at a fever pitch. Students, lured by the prospect of a better future, spend years on end studying in cram schools in a bid to gain admission to the nation’s top universities. However, as these very students move onto college, more and more are finding that the competition is just as fierce, if not more so, in their exit than their entrance — in other words, recent college graduates are having difficulty landing jobs these days.

Anti-South Korean Sentiment in Yanbian (연변)

By Sarah Hong

Sarah is a friend of Michael’s from their time at Northwestern, where she received her degree in Political Science. She spent the formative months of her post-college life in China as a Fulbright Fellow (2012-2013). The following post is an introduction to her research on ethnic minority self-identity in the Yanbian region.

Andrei Lankov dubs Yanbian the “Third Korea”; South Korean mass media portrays it as a perennial backwater home to a countless number of thugs and con artists. Most South Koreans know little about this region of Northeast China, half the size of South Korea and home to the largest and oldest sub-group of the Korean Diaspora – the Chosunjok (Korean-Chinese).[1]

Location of Yanbian (image courtesy of Wikipedia)

Chaebols and the Korea Discount

By Michael Chung

South Korea’s chaebols (image courtesy of Peter Schrank – economist.com)

Both economic researchers and financial analysts alike have documented the existence of a “Korea Discount.” The term refers to the low equity values of South Korean firms in relation to those in comparable capital markets (i.e. Japan, Taiwan, Singapore). In the past, researchers have suggested that the Korea Discount was a result of the perennial threat and instability of North Korea. Other theories have suggested that the South Korean economy is over-reliant on exports in cyclical industries, or that the capital structures of Korean firms are too debt-heavy. However, upon witnessing very little change in both the KOSPI and the Won following the news of Kim Jong Il’s death, researchers have posited a new theory – that the Korea Discount is a result of the poor corporate governance found in the family-run chaebols.