Minutes of McKinnon Lectures (No. 5): Korea's Capital Market

2014-10-17 IMI

Speaker: Dr. Jae-Hoon YOO, Chairman & CEO of Korea Securities Depository 17 October 2014, Beijing Capital Market Development for emerging economics -Financial development has potential effects on long-term growth (King and Levine 1993). A positive and significant correlation between stock market development and economic growth(Levine and Zervos 1998). Bond market development influences real economic activity. (Find, Haiss, and Hristoforova, 2003) -There are still many aspects that we have not figured out yet, impact channels between capital market and economic development, effectiveness of impact channels to economic development, and conditions and consequences determining efficiency of capital market development policies. -Although it is convenient to use advanced capital market, sovereign capital market is essential for domestic economic growth. Korean Capital Market standing -Capital market in Korean experienced five progressive stages, reaches a relatively highly-diversified, large and international status. What makes the Korean Market different -Promoters in Korean early recognized of importance of corporate direct finance, by mobilizing domestic savings through retail investments and encouraging going public. Industry opening, supported by the government, also accompanies the capital market development. -IT industry in Korean although started late, but is getting ahead in the world. In this case, IT infrastructuresare applied for both market supervision and operation. In Korean market, KOSDAQ, KONEX and K-OTC were innovative for prime SMEs, growing SMEs and unlisted companies. -Exceptional innovationsare performed by only a small number of SMEs and restricted by externality, information asymmetry and agency cost. Equity finance is really important and special development of equity market should be innovated for these companies. Way forward -Many lessons can be learned for Korean experience and all economics are coping with new and old challenges. Asian capital market can be initiated and linked with European economics build silk road economic belt. For further details All developments regarding IMI can be followed at http://imi.org.cn/. For further information, contact via imi@ruc.edu.cn or on +86-10-62516755.

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Minutes of McKinnon Lectures (No. 5): Korea's Capital Market

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