Definition of chaebol

Chaebol is a family-run conglomerate in South Korea. Such groups have been at the heart of its rapid industrial development over many years, and tower over almost every area of business: from stockbroking to theme parks; from supermarkets to heavy weapons. [1]

Example
Samsung, which began as a small noodle business in 1938, is now a behemoth. Companies linked to the group, of which Samsung Electronics is just one, make up about a quarter of the Kospi share index. There’s Samsung Heavy, which builds oil tankers, Samsung Everland, which runs a theme park and a zoo, and Samsung Life Insurance, which can presumably insure you against the possibility of being mauled by one of Samsung Everland’s lions. [2]

By 2012, this group is the largest chaebol which accounts for about a fifth of South Korea’s exports.

While the global success of chaebol like Samsung, and Hyundai, motor company, has boosted South Korea’s standing abroad, at home their economic dominance has prompted concerns that they have developed a near-monopoly on the country’s most talented workers, while restricting the prospects of the small companies that supply and compete with them. [3]

Some Koreans blame chaebol for exacerbating the wealth gap by squeezing suppliers too hard. South Korea’s Fair Trade Commission says their dominance also harms consumers. In 2010 it found 3,500 cases of price-fixing. Daniel Tudor, author of Korea: The Impossible Country, a forthcoming book, compares chaebol to tall trees beneath whose canopy nothing else can grow.

Enormous conglomerates were nurtured as national champions under the dictatorship of Park Chung-hee, who ruled until 1979. That helped South Korea’s warp-speed development. But, Mr Tudor argues, that “a totally chaebol-dominated economy” is no longer suited to a country with higher per capita wealth than the European average on a purchasing power parity basis. [4]

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