This study empirically tests whether the growing importance of shareholder value orientation and financial market liberalization can explain the decline in Korean real investment since the Asian financial crisis. First, the results indicate no negative relationship between increased payments to financial markets and the slowdown in Korean real investment. Second, the estimation results do not support the assertion that financial investment earnings crowd out Korean real investment. Third, an increase in the level of uncertainty from financial market liberalization reduces real investment by Korean firms. These results suggest that financial market liberalization explains the slowdown in Korean firm real investment for the 1990-2010 period better than shareholder value orientation does.