ABSTRACT
This chapter covers four periods of chaebol development — 1945–1960, 1961–1979, 1980–1987, and 1988–1996. Samsung dominated the market in the 1950s and the 1960s, whereas Hyundai has replaced Samsung ever since the 1970s. The current financial crisis and subsequent chaebol reforms will produce a new picture of the South Korean economy. Several Korean Japanese had demonstrated enormous economic success in Japan. The birth of the chaebol and its peculiar ownership-control and inter-firm alliance structure are explained by the changing patterns of state-business interactions in South Korea. The chaebol era had come, and it dominated the Korean market without much hostile state intervention. The rise and growth of the South Korean chaebol was an individualistic reaction to state hostility during the military regimes. The decision to start hostile state intervention in the economy was based on a careful calculation to create the prisoner’s dilemma among the chaebol owners.
