This study evaluates whether the financial structure of chaebols has improved after the economic crisis of 1997. Before exploring the main issue this study explores causes of heavy high debt ratio of korean firms. High growth rate, low profit rate, la...
This study evaluates whether the financial structure of chaebols has improved after the economic crisis of 1997. Before exploring the main issue this study explores causes of heavy high debt ratio of korean firms. High growth rate, low profit rate, lack of internal financing and bank centered financial system are shown to make korean firms rely on debt financing. As for the main issue, the financial structure of chaebols, this study shows that although chaebols have been successful in dropping debt ratio to a lower level, they have done it by issuing more equity, not by reducing debt.