Korean firms becoming less competitive

Korea’s top 500 companies have been suffering from dwindling profitability and growth since 2003 due to worsening competitiveness, a report said yesterday.
According to the report by the LG Economic Research Institute, Korean firms’ competitiveness was calculated as 90 between 2001 and 2005, benchmarked to a reading of 100 for the global top 500 companies.
That figure is based on five key measures of corporate management ― liquidity, financial health, profitability, growth and turnover.
“Of the five factors, Korean companies have shown marked declines in profitability and growth since 2003,” the private think tank said in the report.
That reflects a worsened business environment triggered by a credit card bubble in 2003, the Korean currency’s strength against the U.S. dollar and growing economic uncertainties, it said.
In addition, Korean companies are more vulnerable to the instability of the international financial market and other short-term external shocks because their ability to repay short-term debts is much lower global companies’, it said.