Does cartelization deteriorate or enhance industrial competitiveness? A case study of Korean automotive industry

© Éditions ESKA, 2014

CARTELS ET RÉGULATION DES CRISES

DOES CARTELIZATION DETERIORATE OR ENHANCE INDUSTRIAL COMPETITIVENESS? A CASE STUDY OF KOREAN AUTOMOTIVE INDUSTRY by Jimmyn PARC EU Center, Graduate School of International Studies (GSIS) Seoul National University and Ecole Doctorale 188, Centre Roland Mousnier-CNRS UMR 8596 Université de Paris-Sorbonne (Paris IV)

Les fonctions et les effets des cartels restent très controversés. Nous versons à ce dossier le cas de l’industrie automobile coréenne. Le gouvernement a encouragé la cartellisation afin de parvenir à un développement efficace de cette branche et de renforcer sa compétitivité internationale. En particulier, le gouvernement est activement intervenu dans l’industrie pendant les périodes de ralentissement économique. Mais à certains moments les industriels de l’automobile ont regimbé contre cette politique. En définitive, l’industrie automobile coréenne s’est stabilisée et a amélioré sa compétitivité pour devenir l’une des cinq premières mondiales aujourd’hui1.

1 This paper is based on a part of my doctoral dissertation: J. Parc, An Eclectic Approach to Enhancing the Competitive Advantage of Nations: Analyzing the Success Factors of East Asian Economies with a Focus on the Development of South Korea, PhD thesis in history, Seoul National University and Université Paris-Sorbonne (Paris IV), 2014.

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DOES CARTELIZATION DETERIORATE OR ENHANCE INDUSTRIAL COMPETITIVENESS? A CASE STUDY…

INTRODUCTION In South Korea (hereafter Korea), one of the recent hot issues is cartels, notably after 2013 when the largest trade partner, China, took a first enforcement action against the international price fixing cartel2. A number of Korean medias reported that the enforcement of the competition law and sanctions against cartels became very strict in the EU and the US as well3. Several Korean newspapers asserted that foreign governments discriminate Korean multinational companies (MNCs) by utilizing the competition law and the like in order to protect their domestic industries4. According to the Korean Fair Trade Commission, the fines imposed on Korean MNCs reach around KRW 3,4 trillion (approximately USD 3,2 billion), which is the second largest amount after Japanese, followed by Taiwanese firms5. Assuming that Korean MNCs were victimized, these medias even argued that Korean MNCs should learn “strategic approaches” to leniency policy or plea agreement, as foreign MNCs take advantage of these measures. Meanwhile, as

others do, most Koreans usually consider that cartels, collusions, ententes, associations, and other similar agreements or associations hamper economic growth and free trade as they have learned in economics textbooks and seen from media. Although cartels have been traditionally viewed negatively in the development of a national economy, many practical evidences have proved that cartels can also be beneficial, overcoming fixed-cost problems and increasing efficiency, particularly during an economic downturn6. This may be achieved by, for example, reducing overcapacity and/or agreeing on a “fair” price level to avoid bankruptcy and elimination7. While most people regard Korean MNCs as victims, few Koreans know the fact that the Korean government and companies have exploited cartelization to benefit from the aforementioned positive aspects, not only during the economic downturn, but also at the initial stage of several strategic industries, notably automotive and electronics industries. Therefore, before determining whether cartels are beneficial or harmful to the economic development, it is necessary to trace

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On January 4th, 2013, China’s National Development and Reform Commission (NDRC) imposed fines of RMB 353 million (approximately USD 56 million) on six international manufacturers of liquid crystal display (LCD) panels for price fixing in connection with the so-called LCD cartel. This is the first time that Chinese antitrust regulators have imposed a fine on participants in an international price-fixing cartel. Jones Day, January 6th, 2013, http://www.jonesday.com/antitrust-alert—china-takes-first-enforcement-action-against-international-price-fixingcartel-01-06-2013/ (accessed March 21st, 2014). 3 MK News, March 18th, 2014, http://m.mk.co.kr/news/politics/2014/424448; The Aju Business, February 11th, 2014, http://www.ajunews.com/view/20140211080944978; Munhwa Ilbo, November 19th, 2013, http://www.munhwa.com/news/view.html?no=2013111901070224306002; The Herald Business, November 19th, 2013, http://news.heraldcorp.com/view.php?ud=20131119000057&md=20131122004948_BC; New Daily, June 24th, 2013, http://www.newdaily.co.kr/news/article.html?no=159727; E-Journal, November 22nd, 2012, http://www.e-journal.co.kr/news/articleView.html?idxno=791; The Hankyoreh 21, April 23rd, 2010, http://h21.hani.co.kr/arti/special/special_general/27165.html (all accessed March 21st, 2014) (all in Korean). 4 E-Journal and MK News, supra note 3; The Aju Business, February 24th, 2014, http://www.ajunews.com/view/20140223154408347; (accessed March 21st, 2014) (in Korean). 5 Korean Fair Trade Commission, press release, November 18th, 2013. 6 D. Barjot (ed.), International Cartels Revisited-Vues nouvelles sur les cartels internationaux 1880-1980, Caen, Editions du Lys, 1994; J. Taylor, “The Output Effects of Government Sponsored Cartels during the New Deal”, The Journal of Industrial Economics 50, 1, 2002, p. 1-10; H. Schröter, “Cartels Revisited: An Overview on Fresh Questions, New Methods, and Surprising Results”, Revue Économique, 64, 6, November 2013, p. 989-1010. 7 Organization for Economic Co-operation and Development (OECD), Crisis Cartels (January 27th, 2011), available at http://ec.europa.eu/competition/international/multilateral/2011_feb_crisis_cartels.pdf (accessed March 27th, 2014).

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the causes and effects of cartelization in the history of the Korean automotive industry, particularly from the perspective of strategy. First, it is one of the major industries in Korea; second, it represents a dynamics of industry life cycle within a relatively short time — from a small government-controlled parochial industry to a significant global player; and lastly, the industry faced a great turmoil and even helped push Korea into the Asian financial crisis in 1997.

1. CARTELIZATION AS A MEASURE OF STRATEGY For better or worse, cartels have shaped economic and business history since the late 19th century. As Harm Schöter has argued, the prevailing views on cartels are from the consumer’s interests, which concern mostly price. However, from the corporate view, cartelization can be considered as an entrepreneurial act, thus a strategy. This view concerns com-

petitiveness, rather than price. If this is ipso facto, cartelization is designed to enhance the competitiveness of a firm per se or it is part of a process toward a strategic alliance8. A number of scholars have delineated how corporations employ cartelization strategically: providing market and ensuring market share9; sharing patents and knowhows10; and spillovers and innovation11, which are rather indirectly related to price. It is not just corporations that use cartelization as a means of strategy. Governments sometimes take on a considerable role for a fleet of domestic firms: protecting domestic infant industries12, raising national champions13, or even directly and indirectly intervening in major industries for the sake of growth14. Most of the aforementioned cases concern industrial competitiveness. Although the orthodox view of cartels is that a collusive agreement benefits the firms involved at the expense of consumers15, there is a discrepancy between the definitions of cartels at different times16. Also,

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C. Bronder and R. Pritzl, “Developing Strategic Alliances: Conceptual Framework for Successful Co-operation”, European Management Journal, 10, 4, 1992, p. 412-421; J. Fear, “Cartels and Competition: Neither Markets nor Hierarchies”, Working Paper Harvard Business School, 7, 11, 2006, p. 1-31. 9 N. Fligstein, The Transformation of Corporate Control, Cambridge, MA, Harvard University Press, 1990. 10 H. Schröter, “Risk and Control in Multinational Enterprise: German Businesses in Scandinavia, 1918-1939”, Business History Review, 62, 3, 1988, p. 420-443. 11 R. Petri, “Cartels and the Diffusion of Technologies: The Case of Hydrogenation and Catalytic Refining”, Revue Economique, 4, 6, November 2013, p. 287-300. 12 S. Hasegawa, “International Cartels and the Japanese Electrical Machinery Industry in the Interwar Period”, ibid., p. 243-251. 13 T. Yui and K. Nakagawa (eds.), Business History of Shipping: Strategy and Structure, Tokyo, University of Tokyo Press, 1985. 14 E. Hadley, Antitrust in Japan, Princeton, Princeton University Press, 1970; H. Iyori, A. Uesugi, and C. Heath, Das Japanische Kartellrecht, Cologne, Carl Heymanns Verlag, 1994. 15 J. Taylor, “The Output Effect”, art. cit. 16 According to John Connor, Robert Liefmann, one of the most cited authors, for example, defined cartels as “free [voluntary] associations of producers [linked by formal of informal contractual agreements] for the monopolistic control of the market” (R. Liefmann, Cartels, Concerns and Trusts, New York, Dutton, 1932 [1897]); here producers mean independent companies, thus if the associations are enforced by government decrees or parliamentary statutes, they are not true cartels. William Notz accepted Liefmann’s definition. However, in his definition, business organizations may be private corporations, state enterprises, or national cartels. Leading European cartel scholars such as Paul de Rousiers, Kurt Wiedenfeld and others dwelled on conceptual and organizational issues surrounding cartels. They contained little of interest on price or welfare impacts, providing a striking contrast with the industrial analyses emerging in the United States. J. Connor, “Price-fixing Overcharges: Legal and Economic Evidence”, Research in Law and Economics, 22, 2007, p. 59-153; R. Liefmann, Cartels, op. cit.; W. Notz, Representative International Cartels, Combines, and Trusts, Washington, DC, US Department of Commerce, 1929.

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Parc, Jimmyn. 2014. Does Cartelization Deteriorate or Enhance Industrial Competitiveness? A Case Study of Korean Automotive Industry. Entreprises et Histoire 76(3): 92-106. 

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during such downturns20, can be also understood with Michael Porter’s strategic approach: stabilizing the current status and enhancing competitiveness in the end.

2. THE KOREAN AUTOMOTIVE INDUSTRY The Korean automotive industry started with a car called Sibal, built on the basis of a Willys Jeep and other spare parts from US military in 1955. In 1962, the Park ChungHee government initiated the Automobile Industry Protection Law, which forbad foreign companies to sell cars in Korea unless they were cars imported as CKD21 and in partnership with a Korean company. The first conveyor-belt assembly plant and the first modern manufacturing plant were built in 1973 and 1975 respectively. Hyundai Motors (hereafter Hyundai), currently Korea’s largest automaker, produced the first Korean-developed automobile, the Pony, in 1976 and made Korean history by exporting Pony to Ecuador in 1976. In 1986, Hyundai exported made-in-Korea

cars to the US for the first time in Korean automobile history. Although the Korean automotive industry faced turmoil during the Asian financial crisis of 1997, Korean automobile companies recovered soon and increased their production thanks to exports. According to the International Organization of Motor Vehicle Manufacturers (Organisation Internationale des Constructeurs d’Automobiles, OICA), in 2013 Korea is the fifth largest automobile nation in the world as measured by automobile unit production22 and Hyundai is the world’s fifth biggest automaker by sales along with its affiliate Kia Motors (hereafter Kia)23. When one deals with cartelization in the history of the Korean automotive industry, there are two critical points that should be taken into account. First, regarding the automotive industrial policy, there was a significant change in the government’s philosophy by January 1987 when the government cancelled the “Automobile Industry Rationalization Plan”24: it shifted from “support and protection” to “autonomy and competition”25. Second, government inter-

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OECD, Directorate for Financial and Enterprise Affairs, Competition Committee, Global Forum on Competition, Crisis Cartels, Background Note, Session III, DAF/COMP/GF(2011)6, p. 6 et seq. available at http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DAF/COMP/GF(2011)6&docLanguage =En (accessed March 28th, 2014). 21 Completely knock-down (CKD) - completely disassembled cars are shipped and then assembled locally. 22 OICA, 2013 Production Statistics, http://www.oica.net/category/production-statistics/ (accessed March 22nd, 2014). 23 Reuters, April 2nd, 2014, http://www.reuters.com/article/2014/04/02/hyundai-car-idUSL4N0MT0JB20140402 (accessed April 2nd, 2014). 24 Due to the second oil shock and the slowdown in the world economy, the Korean economy faced a sudden crisis. To overcome it, in 1980 the government instructed all automotive companies to integrate with one another in order to reduce costs by achieving economies of scale and product specialization. Hyundai and Saehan were set to merge for passenger vehicles, retreating from the commercial vehicle sector, whereas Kia was enjoined to exit from the passenger vehicle sector with a guarantee of monopoly in the light commercial vehicle sector. However, the original plan of government did not work out. Thus, the government-led “rationalization” was introduced in 1981 and lasted until the beginning of 1987 with several modifications; as a result, Hyundai and Saehan were in severe competition for the passenger car market. 25 Korea Automobile Manufacturers Association and Korea Auto Industries Cooperative Association (KAMA and KAICA), 50 Years of Korea’s Automobile Industry, Seoul, KAMA, 2005, p. 603 (in Korean); regarding the history of Korea’s industrial policy, the World Bank divided into three terms: the take-off phase (1962-1973), the heavy and chemical industry (HCI) promotion phase (1973-1979), and the liberalization phase (since 1979). See World Bank, Korea: Managing the Industrial Transition, Washington, DC, World Bank, 1987.

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Parc, Jimmyn. 2014. Does Cartelization Deteriorate or Enhance Industrial Competitiveness? A Case Study of Korean Automotive Industry. Entreprises et Histoire 76(3): 92-106.

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3. THE KOREAN AUTOMOTIVE INDUSTRY BEFORE 1987: SUPPORT AND PROTECTION Before the Korean government liberalized competition in 1987 by cancelling the Automobile Industry Rationalization Plan, the infant industry argument has been cited as justification of government intervention29. The government, as the ultimate guarantor of property rights, had to plan development strategies, create “restraints of trade”, and provide rents to those in the automobile industry30. Under the powerful leadership of the government, a few corporate alliances, such as the Joseon Auto Industry Union (which became the Korea Auto Industry Union) and the Joseon Auto Parts Task Force, were formed to stabilize the procurement of spare parts for repairing cars and to support supplies for US and Korean militaries31.

3.1. The take-off (1945-1972) In 1950, the Ministry of Commerce together with the Ministry of Transport and the Ministry of National Defense prohibited the importation of thirteen auto parts, which is the first industrial policy that the Korean government initiated. However, because of the Korean War, this plan was not well implemented. The sudden decrease of the market due to war and “imported” parts and components from overseas, notably by US military in Korea, hampered the development of the Korean automotive industry. The total number of cars in Korea was

16431 in 1949 and almost 75 % of them were destroyed by 195132. Disassembled US military vehicles — transferred to private ownership or abandoned — became a source of spare parts. The first Korean car was built in 1955 and in the same year Shinjin Motors and Ha Dong-Hwan Motors were established; the number of cars increased gradually. However, the situation was not favorable when the government announced the “5.8 line policy” on May 8th, 1957 to restrict the import of automobiles in Korea to save foreign currency. Oil was put on rations due to the lack of foreign currency to buy it. Immediately, only few foreign cars were imported. Right after the coup d’État in 1961, the Park Chung-Hee administration set forth economic policies for the domestic automotive industry in 1962 with the Automotive Industry Protection Law, a part of the First Five Year Development Plan. The Ministry of Trade and Industry received the authority for the prohibition of imported cars (except CKD); it subsidized loans; it developed export subsidies and tax incentives; it instituted tariff exemptions for imported components which could not be produced in Korea33. Furthermore, the ministry determined the selection of participants in the industry. The rationales of this law were to accumulate capital and earn foreign currency by the localization of auto parts production which would induce less imports and more exports. Despite all these efforts, this law was not effective. Eventually, the Park

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Y. Heo, “Development Strategy”, art. cit. H.-J. Chang, “The Political Economy of Industrial Policy in Korea”, Cambridge Journal of Economics, 17, 1993, p. 131-157. 31 KAMA and KAICA, 50 Years, op. cit., p. 809-811. 32 Ibid., p. 111. 33 L. J. and D. B. Truett, “The South Korean Auto Industry: All Grown Up Now?”, The University of Texas at San Antonio, College of Business Working Paper Series, 2012. 30

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DOES CARTELIZATION DETERIORATE OR ENHANCE INDUSTRIAL COMPETITIVENESS? A CASE STUDY…

automotive industry’s growth for several years and that it negatively affected the industry. The integration policy was shortsighted — merely to normalize the industry without any long-term plan; the idle and other uncountable assets of each company were huge for two years45. The Chun administration acknowledged the drawbacks of the integration policy and later introduced the Automobile Industry Rationalization Plan on February 28th, 1981. A modification followed on July 26th, 1982. As the market situation improved, Hyundai was able to mass produce passenger cars and export them to Canada in 1983 and finally to the US, the largest car market, in 1986. At this point in time, carmakers started to invest in R&D in earnest to enhance the competitiveness of their models against foreign carmakers abroad46. Jordi Catalan, Andrew Green, and Gordon Waitt have shown that Korean automobile companies’ production cost reduction and entry into the North American market were outcomes of the rationalization47, due to a “relatively” fair domestic competition. To sum up, regarding the automotive industry as a strategic industry for national development, the government became involved in the industry through a variety of policies, including export promotion and acquisition of technology. Moreover, the government intervened in this industry with policies designed to enhance competitive-

ness by achieving lower costs and to facilitate growth by establishing mass production. Although the Park and Chun administrations intervened aggressively in the industry, their policies differed. The Park administration had a long-term plan, including localization of parts48 and Koreandeveloped cars, whereas the Chun administration aimed to stabilize the industry and focused on overcoming the recent crisis.

4. THE KOREAN AUTOMOTIVE INDUSTRY AFTER 1987: AUTONOMY AND COMPETITION During the 1980s, Korean automotive companies became competitive and selfsupporting. The liberalization, after the cancellation of the Automobile Industry Rationalization Plan in 1987, put companies in free competition. As Korean automobiles manufacturers expanded their domestic and foreign markets, the Korean automotive industry faced pressure to open its domestic market. In this context, Korean companies felt the need to organize a strong alliance for their common interests and they established the Korea Automobile Manufacturers Association (KAMA). This organization raised its voice and engaged actively in business, although it became weaker during the Asian crisis49.

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KAMA and KAICA, 50 Years, op. cit., p. 220. KAMA and KAICA, 50 Years, op. cit. 47 J. Catalan, “Strategic Policy Revisited: The Origins of Mass Production in the Motor Industry of Argentina, Korea, and Spain, 1945-87”, Business History, 52, 2, 2010, p. 207-230; A. Green, “South Korea’s Automobile Industry”, Asian Survey, 32, 5, 1992, p. 411-428; G. Waitt, “Say Bye to Hyundai and Hi to Korean Autoparts? Restructuring the Korean Automobile Industry in the 1990s”, Tijdschrift voor Economische en Sociale Geografie (Journal of Economic and Social Geography), 84, 3, 1993, p. 198-206. 48 C. K. Kim and C. H. Lee, “Ancillary firm development in the Korean automotive industry”, KIEI Working Paper, 1980. 49 S.-Y. Kim and J.-Y. Kim, “Economic Crisis”, art. cit. 46

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Parc, Jimmyn. 2014. Does Cartelization Deteriorate or Enhance Industrial Competitiveness? A Case Study of Korean Automotive Industry. Entreprises et Histoire 76(3): 92-106.

DOES CARTELIZATION DETERIORATE OR ENHANCE INDUSTRIAL COMPETITIVENESS? A CASE STUDY…

Ha-Joon Chang and Jang-Sup Shin have asserted that the measures enacted to settle down the financial crisis should be interpreted as government leading M&As or restructuring68. However, as mentioned above, at least for the Korean automotive industry, the Korean government first took a wait-and-see attitude. Only when there was an urgency did the government intervene actively to solve the problem at hand, contrary to the past.

5. DISCUSSION In the history of the Korean automotive industry, the Korean government actively employed various cartel-like measures to develop, normalize, and revitalize the industry. Thus, they all converged on enhancing competitiveness. The policies differed strategically across the changing development stages of the industrial and international business environment; this “policy inconsistency” was also due to the inexperience of government in the early years69. From a strategic point of view, the Korean government actively protected firms and intervened both when the industry was in the infant stage of development (i.e. during the 1960s-1970s) and during economic downturns (i.e. in the late 1970s-early 1980s and during the Asian financial crisis of 1997)70. In addition, Korean auto manufacturers systematized vertical activities with parts suppliers to enhance efficiency for mass production. When the industry was in its growth stage,

not only auto manufacturers, but also parts providers organized joint associations or R&D centers to maximize creation. Automobile cartelization, to stabilize the market or to protect their own benefits, did not appear soon in the history of Korean automotive industry. A relatively strong corporate cartel appeared in the mid-1990s, when the industry was on an narrow growth path, to oppose the entry of Samsung in the automotive industry. It was more than a pro forma opposition: each player’s position was different from one another. So, it was not strong enough to obstruct the new entrant. A noteworthy feature in the Korean automotive history is that government-led cartelization aimed at overcoming internal (i.e. underdeveloped technology and market) and external (i.e. lack of foreign exchange and shortage of energy) disadvantages with corporations’ active participation, which was meant to enhance competitiveness. Furthermore, although government and corporations effectuated cartelization measures, their intentions were not to keep the current industrial status quo, but they were forward-looking for further development: for instance, localization of auto parts, Korean-developed cars, and exports orientation. In addition, the Korean government and corporations utilized internationalization as a tool to achieve better competitiveness and further development, from joint venture production to foreign direct investment, although the means differed strategically across the time71.

68 Ha-Joon Chang and Jang-Sup Shin, “Critical Assessment of Post-crisis Corporate Restructuring in Korea”, Journal of Korean Economic Analysis, 9, 3, 2003, p. 255-291 (in Korean). 69 See also M. Lautier, “ ‘Avoiding the Neighbours’: The National/Global Development Strategy of the Korean Automobile Industry”, in J. Carrillo, Y. Lung and R. van Tulder (eds.), Cars, Carriers of Regionalism?, Basingstoke, Palgrave Macmillan 2004, p. 218-232 and 266-267. 70 Among the three cartelization-like government interventions, only the integration policy of 1980 was severely opposed by participants, notably by GM. Also, Korean companies were already too large to be controlled by the government. For the Korean government, the American MNC GM was too complicated to deal with. Also, although the economy was unfavorable in the early 1980, market forces worked relatively well in a free market economy. 71 M.-K. Chung, “The chance of a peripheral market player: the internationalization strategies of the Korean automobile industry”, in M. Freyssenet, K. Shimizu and G. Volpato (eds.), Globalization or Regionalization of the American and Asian Car Industry?, Basingstoke, Palgrave Macmillan, 2003.

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The Korean government’s cartelization policy was strikingly similar to the Japanese experience72. From the 1940s to the 1950s, Japanese automotive companies were allowed to produce only a limited number of vehicles. This policy delayed the development of Japanese automotive industry. In order to overcome this tardiness, the Japanese government banned the import of foreign cars and promoted Japanese companies to engage in partnership with foreign companies. The government also fostered spare part producers and intervened to induce monopolistic and oligopolistic structures to enhance efficiency for mass production. However, Hongbong Choi73 argues that companies’ opposition to government policy kept the industry with severe rivalry which have made the auto industry more competitive in Japan, while the Korean automotive industry is more oligopolistic.

CONCLUSION Although the traditional view has highlighted the negative aspect of cartels, many scholars have argued with empirical tests and cases that cartelization also has positive aspect. In this manner, the spread of cartels is one of the most controversial issues regarding economic growth. Through the history of the Korean automotive industry, the positive aspects of cartelization, which are mostly related to enhancing competitiveness, have been observed. However, cartelization was mostly done by government during the infant stage of the industry or during economic turmoil.

Government used corporate alliance as a tool of communication, though it was mostly unilateral. Since they worked together to achieve a common object ―industrial and economic developments―, the goal lubricated the relationships between government and corporations. Furthermore, various measures of cartelization were strategically utilized for further development, rather than for keeping the status quo. Through three times of government’s major cartelization and interventions — although the case of the Korean automotive industry is not a typical orthodox form of cartel, the Korean government acted as an entrepreneur in the Schumpeterian sense — , one important implication can be drawn. The policy in the early 1980s implied that cartelization formed by the government to “violate” the market force, although the market was functioning well, would face unexpected hindrances and side-effects for industrial development and growth. Thus, cartelization should be carefully considered for economic growth whether it is in an economic upturn or in a downturn. In Korea, besides the automotive industry, another major industry is electronics. Compared with the automobile industry, in electronics cartels and corporate alliances appeared earlier; the electronics cartelization was more active and tightened than that of automotive industry, which further prevented government intervention. Comparative studies and analyses on different causes and effects of cartelization between these two Korean industries would yield interesting policy implications for industrial and economic development.

72 According to Won-chul Oh, who took the lead in the HCI policy as a senior presidential secretary for economic affairs from 1971 to 1979, he submitted a report on the Japanese HCI policy to President Park and the Korean HCI policy was based on this report. Won-chul Oh, Park Chung-heeneun Eotteotge Gyeongjegangguk Mandeuleossna: Bulgului Dojeon Hangangui Gijeok, Seoul, Dongseomunhwasa, 2006, p. 155-189 (in Korean). 73 Choi, Hongbong, “A Comparative Study on the Automotive Industrial Policy of Korea and Japan”, Journal of Regional and social Studies, 21, 2, 2013, p. 73-90 (in Korean).

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