This study tries to analyze profit rates and productivity changes of Korean firms before and after the financial crisis. It also empirically analyzes what would be the effects of corporate restructuring on reorganization success. The results can be summarized as follows.

First and foremost, after the financial crisis the performance of Korean corporations has been clearly improved, when the economic performance of a firm is measured by profit rates and productivity. The profit rates of Chaebol, large enterprises and high-tech enterprises were improved more distinctly than the ones of non-Chaebol, small and medium-sized firms and traditional corporations. We drew almost same picture in the measure of productivity.

Secondly, the analysis shows that debt restructuring, labor restructuring and fixed asset restructuring contributed to improve the profit rates of Korean firms. In the estimation of productivity, debt increment was shown to be a factor to increases productivity. Debt increment can augment corporation's productivity through the disciplinary role of banks. This result implies that the debt level of a firm can not be designated uniformly.  

Thirdly, firm size, proportion of intangible asset and cash flow ratio seem to be positively related to the reorganization success. In addition, debt restructuring is also positively related to firms’ reorganization success. Firms growth potentialities such as the value of intangible assets and increase of cash flow ratio are gaining more power in explaining firms' reorganization.

After the financial crisis Korean firms succeeded to improve financial structure and cash flow through debt restructuring. Nevertheless, although they retain a high level of cash flow, investment rates stay very low level and the low investment rates seem to be getting fixed. Recently, Korean firms show a tendency to increase the investment on intangible assets while decreasing the investment on tangible assets.

Fifthly, we need to point out an outstanding contrast between the fast growth of high-tech firms and sluggish recovery of traditional firms. After financial crisis, high-tech firms in Korea have been displaying a rapid growth, a low debt rate, high cash flow ratio and also showing a lofty investment rate comparing with traditional corporations. This result is quite meaningful in terms of suggesting a direction for growth in Korea hereafter.

Several policy implications can be drawn, based on these analysis results. First of all, the firms of poor performance were sifted out and this leaded to improve the performance (in term of profit rates and productivity) of firms in overall. The corporate restructuring which has been executed right after financial crisis seems to move the resources from poor performing sectors to good performing sectors. Further deregulation is needed to facilitate the mobility of capital and labor from inefficient sectors to efficient sectors through a natural market selection process.

Second, there has been a restructuring process to aggrandize the growth of high-tech firms after the financial crisis. This tendency needs to be sustained further. Active restructuring should be continued and substantial institutional reformations are needed for nurturing and growing more high technology firms.

Third, knowledge-intensification of firms is proceeded rapidly in Korea. Before the financial crisis, the intangible assets were very insignificant but after the crisis, the importance of the intangible assets is increasing while the importance of the tangible assets is decreasing conspicuously. It is a recent phenomenon that the ratio of intangible assets such as R&D and knowledge property are increasing. Korean firms seem to increase their value through accumulating the knowledge assets. In regard to reorganization success,  the firms with high intangible assets have more potentials to survive. To survive and grow, Koran firms have to continue or expand their R&D investment and institutions should be further improved to form a supporting environment.