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The Study on the Establishment and Growth of Japanese-Korean Banking Groups: Laying Emphasis upon Comparison between Mindan and Chongryon Societies

Youngeon Yim 1,  CHOI SOUG SHIN 1

1전남대학교

Accredited

ABSTRACT

This article is to analyse and to compare the two profit banking organizations paying attention to the economic, social and political factors which had occurred in the establishment and the growth processes of Japanese-Korean ethnic banks in Japan. So to speak, we not only identify the two groups’ various characteristics but to propose some implications and further research themes as well. Major differences between the two groups are as follows. First, the groups began to deploy from early 1950’s and expanded to nation-wide Japan during 1960’s. They have been established at almost every Japanese prefectures till the early 1980’s. Among the total 77 ethnic banking firms (actually they all are banking cooperatives.) in whole Japan, 39 firms belonged to the Mindan group and 38 firms belonged to the Chongryon group. Second, the establishment of the ethnic banking groups have been based upon confrontation mood between South Korea and North Korea. Regionally speaking, Southern group (or Mindan group) have been established around the downtowns of big cities such as Tokyo, Osaka, Kobe, Kyoto little earlier than the Chongryon group. Mindan group have emphasized business size and profitability, while Chongryon group have stressed ethnic networks or solidarity rather than profitability. Third, competitive confrontation between the two groups have ethnic banking firms facilitate growth and development. The Japanese-Korean businessmen have long faced severe ethnic segregation in the local Japanese society. In conclusion, they couldn’t evade bankruptcy owing to social economic depressions such as severe Japanese chauvinism, anti-North Korea moods, global currency crisis and management moral hazard and so on. Mindan group would prefer M&A with the Japanese banking groups. Chongryon group would survive alone for the time being on the basis of strong ethnic networks. The two groups may pursue new establishment in the third countries just as Korean ethnic firms do in South east Asia.

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* References for papers published after 2023 are currently being built.

This paper was written with support from the National Research Foundation of Korea.
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