South Korea, even though it takes the position of the 12th biggest economy in the world, has been experiencing economic hardship in recent years. However, news has it that
large business groups in Korea are sitting on a pile of cash surplus. Report reveals that "In the first quarter of 2015, the combined retained earnings of the 30 largest business groups in Korea reached 710 trillion Korean won, the equivalent of roughly 617 billion US dollars. The top 5 business groups alone are holding 502 trillion won, or 436 billion dollars. This is a 5.7 percent increase from a year ago"
Is it possible for business to keep cash being piled up without reinvesting? Why is there such critique? How should government intervene in this failure situation of economy?
The attached file is an opinion of Yoon, Jungmo - a Ph.D., Research Fellow, International Finance Team of the Korea Institute for International Economic Policy.