ASIA GOVERNANCE MONITOR - ISSUE 02 - KOREA PART I
A country can build world-class companies without delivering equally strong returns to their shareholders. Korea’s industrial success and persistently low equity valuations illustrate why understanding a business also requires understanding who controls it.
In the second issue of the Leopard Asia Governance Monitor, “Korea: How the development state shaped the shareholder’s return,” we trace how government backing and family-controlled business groups helped transform Korea into a major industrial economy, and why the ownership structures that supported that growth continue to shape shareholder returns.
The Korea discount reflects both weak profitability in parts of the economy and uncertainty over how investors will participate in corporate success. Understanding it requires looking beyond the assets a company owns to the decisions that determine what those assets are worth to an outside shareholder.