rld attention based on the troubling fact that, as of June 1997 more than 7,000 companies had filed for bankruptcy protection, with the average reaching some 50 companies per day. Businesses defaulted on debts totaling $7.6 billion in the first four months of 1997--a 50% surge over 1996 (Nakarmi, 1997).
A reasonably-balanced report of the crisis appeared in the November 24, 1997 Wall Street Journal:
Once, South Korea was the gold standard of developing economies, a land that went from poverty to riches in 35 years. Now it is poised to take what may be the International Monetary Fund's biggest-ever bailout. What happened? The answer lies in what didn't happen. The crisis facing Seoul underscores how much faster and further Korea's economy has come than government economic policy has -- or, more to the point, the tight relationship between government and conglomerates (Kahn & Shuman, 1997, A1).
These words emphasize the dark side of the Korean economy, but fail to recognize that, historically, there were many positive benefits generated by the "chaebol." The clamor has grown so great that economists and politicians, both around the world and within Korea, are calling for the death of the chaebol. Whether or not that will ever happen is speculation beyond the scope of this research.
Instead, the chaebol as an institution will be analyzed within five areas. Part 1: A Korean Economic Snapshot, positions that country within the world economic market. Part 2: The Chaebols Close Up, examines the reasons why the chaebol grew into such an mega-economic model. Part 3: The Business of Chaebols, explores some of the strategic reasons why the chaebol leaders might have chosen the tactics they did. Part 4: Banking on the Chaebols, discusses the integrated links between banking and industry. Part 5: Tomorrow's Chaebol, deals with some of the suggestions constantly being made about the future of this economic model.
Ch...