ABSTRACT
Most Asian countries suffered from a tough time in 1997 and 1998 because of the financial crisis that severely devastated their economies, and the Republic of Korea (hereafter South Korea) was no exception during the time period. For example, the value of South Korea’s currency was depreciated more than 100% against the US dollar in December 1997 (Kim & Hwang, 2000), and the net inflow of foreign direct investment (FDI) was turned to –US$1.4 billion in 1997 (Athukorala, 2003). As a result, the country experienced a drastic fall of the real gross domestic product (GDP) growth rate, from 4.7% in 1997 to –6.9% in 1998, and its export growth rate also plunged from 5.0% to –2.8% over the same period (Thangavelu et al., 2009).
