□ This study attempts a statistical examination and analysis of the characteristics and situation surrounding business groups (Chaebol) in Korea in order to provide basic information for corporation policy and the ongoing business group debate.
○Business groups have continued to account for an overwhelming share of the Korean economy, even after the intense restructuring of the late 1990s foreign exchange crisis.
□ The 55 business groups subject to cross-investment restrictions in 2010 accounted for 29.1 percent of all sales and 8.0 percent of all workers in the national economy.
○ In terms of broader industry categories, business groups represent an overwhelming portion of manufacturing sector and relatively low percentage of services sector.
○ As a long-term pattern of change, the top 30 business groups in manufacturing sector have accounted for a rapidly growing share since the late 2000s. This phenomenon is the result of continued rapid growth by a small number of very large companies amid a general drop-off in growth for the economy as a whole.
○ For manufacturing sector, business groups account for a generally large share of the country’s mainstay industries, but not an especially large share of its smaller-scale ones.
Business groups have moved into a wide range of industries and frequently hold monopoly or oligopoly status in those markets.
○ For industries where large business groups ranked among the top three performing companies, the average concentration rate for the three companies (CR3) was 51.8 percent.
- For industries where large business groups were not present, the CR3 averaged 43.9 percent.
○ Business groups typically have strong market control in large-scale industries or industries with large markets.
- Numerically, business group affiliates ranked first for market share in 23.7 percent of cases, but accounted for 48.5 percent of industry sales.