Property Registration and Economic Growth: Evidence from Colonial Korea

Abstract This study empirically applies de Soto’s representative property system to Colonial Korea, based on the theoretical approach of Han’s 2020 work. The number of property registrations increased drastically after the completion of the Land Survey Project in 1918, along with the mortgage count and bank loan balance. Structural change tests confirm this observation, and Johansen cointegration tests show that property registration, mortgage, bank loan, and gross domestic product are cointegrated with each other. One-way causality/exogeneity is revealed from property registration, mortgage, and bank loans to GDP by Granger, vector error correction model, and impulse response function models, with the role of mortgage standing out. These findings support the hypothesis that a representative property system established in the 1920s in Colonial Korea has paved the way for an economic take-off of Korea (South) over the course of the next several decades.