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Investment Bust in Post-Crisis Korea: Fact or Fiction?

Lim, Kyung-Mook / Lim, Won Hyuk

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dc.contributor.authorLim, Kyung-Mook-
dc.contributor.authorLim, Won Hyuk-
dc.date.available2018-12-28T08:45:09Z-
dc.date.created2018-12-28-
dc.date.issued2007-02-
dc.identifier.issn1535-3516-
dc.identifier.urihttps://archives.kdischool.ac.kr/handle/11125/29886-
dc.identifier.uri10.1162/asep.2006.5.3.1-
dc.description.abstractIn post-crisis Korea, facility (equipment) investment shows the worrisome trends of a slowdown in investment growth and a decline in investment propensity. We marshal micro and macro data to examine four major explanations for these important developments. Our analysis: (a) finds that cyclical factors such as depressed private consumption in 2003 and 2004 did lead to lower investments in automobiles, hence dragging down total investment growth in these years; (b) rejects the claim that investment was lowered by an “anti-chaebol environment” created by the Roh Moo-hyun government (facility investment by large firms actually increased by a great deal in 2003 and 2004, whereas aggregate investment in the national account showed anemic growth); (c) supports the “moral hazard” hypothesis, which states that chaebol investment in the pre-crisis period was abnormally high because of implicit state guarantees (the chaebol dummy in our investment equations was no longer statistically significant in the post-crisis period, in the aftermath of large-scale bankruptcies); and (d) supports the “hollowing-out” hypothesis, which holds that outward foreign direct investment has reduced domestic facility investment because the price competitiveness of final assembly and other labor-intensive sectors in Korea has been eroded by the rise of late-developing countries such as China and Vietnam.-
dc.languageEnglish-
dc.publisherMIT Press-
dc.titleInvestment Bust in Post-Crisis Korea: Fact or Fiction?-
dc.typeArticle-
dc.identifier.bibliographicCitationAsian Economic Papers, vol. 5, no. 3, pp. 1-18-
dc.description.journalClass3-
dc.description.isOpenAccessN-
dc.citation.endPage18-
dc.citation.number3-
dc.citation.startPage1-
dc.citation.titleAsian Economic Papers-
dc.citation.volume5-
dc.contributor.affiliatedAuthorLim, Won Hyuk-
dc.identifier.doi10.1162/asep.2006.5.3.1-
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