Korea's Capital Market Promotion Policies : IPOs and Other Supplementary Policy Experiences

There are two unique approaches or policy stances Korean government took in regards to the capital market. First, the Korean government was actively involved in promoting the capital market. The government, for example, gave tax incentives to encourage IPOs. It sometimes threatened to publicly admonish those that refused to go public. No stock exchange in a development country has ever experienced such government involvement. Combined with rapid economic growth, this interventionist approached allowed the Korean stock market to experience phenomenal growth over a short period of time. Second, the promotion of capital market had a number of objectives. One was to mobilize domestic capital for economic development. Another was to lowering firms' debt-to-equity ratio. But, most interestingly, the Korean government wanted to popularize stock ownership, and thereby let ordinary Koreans to share the fruits of economic growth. People's stock ownership plan was the most noteworthy example