What Is Chaebol

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What is a Chaebol?? -It is a conglomerate of businesses, usually family owned, business group especially in South Korea. * It is a large business group managed by family members/relatives in many diversified business areas. -The concept of Chaebol is very similar to the Japanese ‘Zaibatsu’ -2 conditions that need to be satisfied to be a chaebol. * 1) Owned by family members, relatives. 2) Having diversified business operations. -Chaebols have political affiliations, and strong government support. Impacts of chaebols relating to economic growth -Samsung alone contributes to 20% of the national GDP. -GDP grew by 10% almost every year due to government supported chaebols which caused korea to be heavily dependent on export and the chaebols themselves. -By 1962, all commercial banks were nationalized, channeling financial resources to the chaebols under the directive of the government. The share of these conglomerates in total credit advanced by financial institutions was over 60% during the period from 1960-1991 (‘The Post-Crisis Changes in the Financial System in Korea: Problems of Neoliberal Restructuring and Financial Opening after 1997’, Kang-Kook Lee, TWN Global Economy Series, 2010). In return, these conglomerates were required to fulfill ambitious export obligations, which fueled rapid economic growth for these 30 years. -Samsung group sells more smartphones than Apple Inc., while Hyundai Motor Group, once known for unreliable cars, is aiming at Bayerische Motoren Werke AG in luxury vehicles. Sales of the top 30 chaebols equaled 82 percent of South Korea’s $1.12 trillion gross domestic product in 2012, up from 53 percent in 2002. Samsung alone took up 20%. (Yoolim Lee, 2013, ‘Growth not missile threat top Park’s South Korea agenda’ , Bloomberg market magazines [Online], Available at:
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