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Title: Institutions, the state and performance : evidence from South Korea
Author: Lee, Jongseok
Awarding Body: University of Leeds
Current Institution: University of Leeds
Date of Award: 2011
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The purpose of this thesis is to investigate whether State intervention in the market can be a catalyst for economic growth by examining the cases of South Korea. Since Stale intervention in the market typically takes two form; namely, implementing industrial policy and controlling State-owned enterprises (SOEs). I investigate industrial policy as an overall strategy of state intervention. and performance contract and board of directors as governance mechanisms of SOEs. In doing so the thesis contributes to the existing knowledge in the following ways. First, this thesis extends the existing literature on industrial policy by shedding new light on the dynamic nature of industrial policy. That is, industrial policy necessarily changes the market conditions where it ha: been shaped and, therefore, it becomes outdated. which necessitate new policies. Given this, I propose a dynamic framework for successful industrial policy over time and find that South Korean industrial policy over the period 1960-1996 an be explained within the framework. confirming that successful industrial policy. hould be a dynamic and evolutionary process which is responsive to changes in institutional environment. Second. the thesis extends the existing literature on performance contracts (PCs) by examining whether PCs an actually improve the performance or SOEs. From relevant theories, the thesis draws out conditions that 'sensible' PCs measures should meet so as to effectively motivate SOEs to perform better and the use of Total Quality Management (TQM) as a basis for generating specific PC measures. The arguments are then empirically tested using data from the South Korean PC which are built on TQM. The results show that the South Korean PC meets the condition. for 'sensible' measure, and actually improve the performance of the South Korean SOEs. indicating that PC: can improve the performance of OE: where PCs incorporate sensible measures. Finally, this thesis. extends the existing literature on corporate governance by empirically investigating how corporate boards add value to firms in the context of SOEs. and how SOE boards interact with PCs. sing a novel framework that incorporate board process, the thesis. derives empirical evidence that PCs act as substitute for board monitoring. The results indicate that SOEs do adjust their internal governance in response to internal imperatives (the reduced need for monitoring due to the presence of PCs) rather than institutional pressure of PCs for effective monitoring. This implies that regulators should consider this subtitutive effect when they design the governance structure of SOEs.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available