Big conglomerates dominate the Korean economic as do small firms the Taiwan economy. I characterize Korea as a relatively low-trust society with a pro-chaebol policy bias, and Taiwan as a relatively high-trust society with an anti-big-conglomerate policy bias. I content that the differences...

In the 1960s and 1970s, bank credits were rationed essentially on the basis of firm's export-performance in Korea. Financial institutions did not have the ability to properly evaluate prospective entrepreneurs and potentially high return projects. It was cost-quality competition at the...