Ten chaebol make up half of output

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Ten chaebol make up half of output

Korea’s top 10 conglomerates accounted for more than half of the overall industrial output of local listed firms in the first three quarters of last year, spurring concerns over imbalanced growth between large enterprises and smaller companies, data showed yesterday.

The combined sales of the big business groups reached 470.8 trillion won ($421.1 billion) in the January-September period in 2011, or 52.27 percent of the 900.8 trillion won tallied for all listed companies, according to local financial information provider FnGuide.

The proportional output of the chaebol is the largest since 2007, a year before the local financial market tumbled after the collapse of Lehman Brothers in the U.S.

In separate data by chaebol.com, a corporate information provider on large businesses, the total market capitalization of the 90 listed firms affiliated with the 10 largest conglomerates stood at 647.9 trillion won as of the end of last December, or 52.83 percent of the total 1,226.6 trillion won.

The figure jumped more than 10 percentage points from the 40.75 percent tallied in 2007, the data showed.

Experts raised concerns that such developments could undermine the balanced growth of Asia’s fourth-largest economy.

Such dominance by a few conglomerates could result in collusion, or unfair trading, in which a chaebol gives all of its outsourcing work to its affiliates, creating a discrepancy between smaller firms linked to conglomerates and their independent rivals, experts said.

Industry watchers said that despite the positive influence of the chaebol on the domestic economy, the government must pursue policy initiatives that would nurture smaller businesses and allow them to compete fairly in the market against large companies.


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