Before the 1997 crisis, Korean firms destroyed shareholder value and chronically produced nonperforming loans for financial institutions. In particular, chaebol‐affiliated and unionized firms did so, with lower profitability among the financially unsound firms. Chaebol and unions thus...

This paper first shows that Korea implemented industrial policy properly, promoting infant industries rather than mature ones. The paper then shows that infant industries promoted by industrial policy have matured over time, as well as grown faster than mature industries not promoted by...

This paper analyzes the effect of unions on the profitability of firms under different political and economic environments in Korea. During the authoritarian period (1981--1986), unions lowered firm profitability despite the repression by the state, due to the strong protection of individual...

This paper first show that South Korea's industrial targeting in the name of heavy and chemical industry drive in the 1970s managed to produce industries with international competitiveness over time. It then performs ex post cost-benefit analysis to show that industrial targeting in Korea has...