1. Atelier V. « Diversity and Transformation of Capitalisms in Asia». Financialization without financiers ? The puzzle of the shareholder value in Korea. Pauline DEBANES PhD candidate EHESS International Conference Research & Regulation 2015 The Theory of Regulation in times of crises Paris, June 9-12, 2015

2. INTRODUCTION: CONTEXT  Financialization  macroeconomic stylized facts : lower investment rate, lower growth rate, lower profit rate in the real sector, change of the value added repartition.  3 main dimensions : evolution of the financial sector, transformation of NFCs behavior (financial activities and maximization of the SV) and rise of household financial flows  Empirical evidences from Korea

3. OUTLINE  INTRODUCTION: CONTEXT  A REGULATIONIST FRAMEWORK OF FINANCIALIZATION  EMPIRICAL EVIDENCES OF FINANCIALIZATION IN KOREA  THE PUZZLE OF THE SHAREHOLDER VALUE IN KOREA

4. A REGULATIONIST FRAMEWORK OF FINANCIALIZATION  Finance-dominated accumulation regime  Finance-led or finance-dominated ?  Macroeconomic features of a finance-dominated regime (Stockhammer, 2007)  Political dynamics  Hierarchized heterogeneous socio-political coalitions struggling for hegemony  Balance of power, accumulation regime and the State (Jessop, 2002)  Institutions as political compromises (Amable & Palombarini, 2009)

5. EMPIRICAL EVIDENCES OF FINANCIALIZATION IN KOREA 2 dimensions:  Rise of the financial sector  Increase financial activities of NFCs :  Crowding-out of investment  Shareholder value

6. Financial sector development in Korea TAKE OFF OF THE CAPITAL MARKET AFTER 1997 KOREA’S CAPITAL MARKET IS CATCHING UP WITH US AND UK LEVEL Source: Bank of Korea, Table 6.2.2Source: Worldbank database

7. Financial sector development in Korea INCREASING CONTRIBUTION OF THE FINANCIAL SECTOR Source : Bank of Korea. Profits are proxied with operating surplus

8. Financial activities of NFCs A LARGE INCREASE OF FINANCIAL ASSETS RELATIVE TO TANGIBLE ASSETS Source : Bank of Korea, table 12.8.6 Financial assets are computed as quick assets plus investment in securities Source : OCDE database, 14A. Non-financial accounts by sectors, SNA93. Profits are proxied with Entrepreneurial income GermanyFranceUKJapanUSKorea Interests6.3%11.3%1.1%3.7%8.3%10.2% Distributed income of corporations 11.2%34.2%19.7%6.5%6.4%6.5% SIMILAR FINANCIAL INCOME FROM FINANCIAL ACTIVITIES COMPARED TO GERMANY, THE UK AND THE US

9. Financial activities of NFCs DIVIDENDS RATIOS OF LARGE MF FIRMS DIVIDENDS’ SHARE OF LARGE MF FIRMS Source: Bank of Korea, Table 12.3.4Source: Bank of Korea, Table 12.11.4 Statement of Appropriation of Retained Earnings

10. THE PUZZLE OF THE SHAREHOLDER VALUE IN KOREA – The case of chaebols Puzzle: How can we have financialization without a rising shareholder value among NFCs?  A new sociopolitical coalition after 1997  Structural reforms of 1997  Convergence of neoliberal elites and progressive elites  Rising contradictions inside chaebols  Organizational structure of chaebols  Rising contradictions of domestic and international strategies  Coping mechanism: resistance against minority shareholder

11. THE PUZZLE OF THE SHAREHOLDER VALUE IN KOREA – The case of chaebols IMFStateChaebols International Domestic Bailout program Access to global markets Keep preferential treatment Progressive elites Neoliberal elites Convergence of interests Curb down their power New coalition

12. CONCLUSION  Local specificities of financialization in Korea  New socio-political coalition  Rising contradictions  Combining industrial and financial capital

13. FUTURE RESEARCH  Sociology of sociopolitical coalitions  Role of the state and more precisely type of the state coevolving with a finance-dominated accumulation regime (cf Jessop)  International hierarchy and complementarities of financial systems

14. BIBLIOGRAPHY  Amable, B., & Palombarini, S. (2009). A neorealist approach to institutional change and the diversity of capitalism. Socio-economic review, 7(1), 123-143.  Jessop, R. D. (2002). The future of the capitalist state. Polity.  Stockhammer, E. (2007). Some stylized facts on the finance-dominated accumulation regime. Political Economy Research Insitution working papers, UMASS.