8/17/2023 0 Comments Parasite in the city gallerySince South Korea implemented financialization as a condition of its International Monetary Fund bailout during the 1997 Asian financial crisis, the country’s economic model has gravitated toward U.S.-style shareholder capitalism. One of South Korea’s first reforms was a radical opening up of financial markets that lifted the prohibition of share buybacks and encouraged more dividend payments - contrary to the established practice in East Asia of retaining profits for reinvestment.Īs a result, the share of investment in South Korean GDP has since declined by 5 percentage points, reducing domestic growth and job creation. Meanwhile, foreign investors’ share of South Korean stock holdings jumped from less than 5% in the mid-1990s to about 40% in the early 2000s. While many long regarded low dividend payments as one reason for “Korea discounts” in company valuations, leading firms such as Samsung are now adopting U.S. practices by paying out about 40% of their net profits to shareholders. And in 2017, Samsung started to pay dividends every quarter rather than annually - a big change, given that annual dividends were once seen as a virtue of East Asian capitalism over Anglo-Saxon short-termism.īut East Asian capitalism now needs re-balancing.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |