The findings of this study furnish supportive evidence that the government has played an
important role in the economic development of Korea. Although the role of the government
in the economic success of these newly industrializing countries, as indicated, is well-documented
in the literature, we deem it necessary to further address this issue in conjunction with our empirical
findings. In addition to providing infrastructure, establishing a modern education system, and
stabilizing labor relation, the Korean government has played an influential role in the following
three areas:
(i) Establishing large conglomerates: To achieve complementarity and forward and backward linkages
of different industries, beginning in the early 1960s, the Korean government adopted the Japanese
model of growth by encouraging large conglomerates to spearhead the drive for development.
By selecting certain products for their high employment multiplier potential, and providing leading
entrepreneurs with generous financial assistance, more than a dozen multinational conglomerates
were formed. Along with Korea's other major industrial corporations they are transforming the
nation from a pushcart economy into high-tech economy