• Journal of the Korean Regional Science Association
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• v.9 no.1
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• pp.79-99
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• 1993

This paper identifies the mechanisms governing the industrial location changes in Korea by focusing upon the emergence of the country's large conglomerate business organizations (chaebols). As the country has distinctive industrial organization, production systems, and government-business relations, this study tries to develop an ideal conceptual framework for the analysis of industrial location changes in Korea. It perceives the Korean economy as a system within which 'space-organizing', lage business organizations interact over time with government, smaller firms and multinational corporations at different geographical scales. The usefulness of the model is assessed using a case study of Korea's most representative chaebol, the Samsung Group. This study identifies chaebols as the dominant institutions in Korean society. Their growth and business strategies have been influenced by the Korean Government through its power to allocate capital resources. Regional dynamics of industry and labor, therfore, have been strongly influenced by changes in the location, industrial structure, and production system of chaebols. With econmic power concentrated within a few giant business groups and their major areas of operation restricted, unbalanced regional development has resulted. Dissatisfaction from residents in less-developed areas has pressured the Government to advise chaebols to disperse their production facilities. Most small and medium-sized firms are closely linked to large corporations through subcontracting. By forming hierarchical subcontracting. By forming hierarchical subcontracting systems, chaebols have indirectly exploited scattered, part-time, home-based, female and lower-paid laborers organized by subcontractors. Further, chaebols have expanded their business arena to encompass overseas locations in a bid to overcome the problem of a small domestic market, trade regulations and increased market, trade regulations and increased labor costs. Through their international business networks Korea's local and regional economies are integrated into the world economy. Indeed, the identification of the changing relationships of chaebols with both the Korean Government and smaller firms is the key to explaining the nations's spatial dyanmics of industry and labor.

• Journal of Korea Trade
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• v.25 no.4
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• pp.108-127
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• 2021

Purpose - On the basis of knowledge transfer theory, we empirically explored how three types of human resource (HR) innovation knowledge exchange within a Chaebol drive the global subsidiary performance of the headquarters (HQ) of a Chaebol's globally affiliated companies. Design/methodology - Using a sample of 176 Korean HQ firms of the top 53 Chaebols and 1,061 of their foreign manufacturing subsidiaries (n = 1,061), we tested the relationship between the exchange of explorative and exploitative sustainable HR innovation knowledge among HQ firms of Chaebols, their subsequent transfer of technical HR knowledge via technical schemas, and the subsequent impact on the global subsidiary performance. Findings - The Chaebols' decisions about the three strategic knowledge management options (i.e., the degree of exchange of explorative and exploitative technological HR innovation knowledge and the extent of HQ-subsidiary HR knowledge transfer) have highly significant relationships with the global subsidiary performance. The results help explains the conditions under which the explorative versus exchange of exploitative sustainable HR innovation knowledge pays off by showing the moderating role of the degree of HQ-to-subsidiary technical HR knowledge transfer, at least in the case of the Chaebol as one representative type of the emerging-market business groups. Originality/value - As the first of its kind in the field of sustainable HR innovation knowledge management at the business group level, the present study makes a clear contribution in demonstrating how the performance of Chaebols' manufacturing subsidiaries depends greatly on their strategy for management of knowledge, as reflected in the choices they make about sharing both explorative and exploitative sustainable HR innovation knowledge among HQ firms and the subsequent transfer of HQ's sustainable HR innovation knowledge to the foreign subsidiaries.

• Knowledge Management Research
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• v.19 no.3
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• pp.113-134
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• 2018

This study examines the roles of intangible and tangible resources of Korean business groups on internationalization by their member firms. Specifically, we argue that not all affiliates receive same benefit from group-level resource sharing. Instead, the effect of group-level knowledge sharing on affiliates' internationalization depends on individual affiliates' relative financial positions within a business group. Using samples of business groups in Korea, chaebols, hereafter chaebols, we find that foreign market knowledge at the group level has a positive impact on the internationalization of affiliated firms while the product knowledge has no impact. Furthermore, we also find evidences that an affiliate with high level of financial capacity receives internal pressures to stay in domestic market to secure internal capital market and support other sister affiliates' international activities.

• Journal of the Economic Geographical Society of Korea
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• v.2 no.1_2
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• pp.145-167
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• 1999

The aim the this paper is to explore the processes of three Korean consumer electronics chaebols'entries into, and exits from tile EU in the context of European integration and enlargement and at the global, regional(EU), national and local level. Korean FDI in the EU has increased sharply since the late 1980s, while interacting with the processes of European integration and enlargement. In particular, the chaebols'FDI was caused by reactions against the intensification of Euro-trade regulations. As a result, these defensive entries have led such chaebols to create a strategy of ‘defensive Europeanisation’through the formation of forward and backward linkages between chaebols’affiliates and Korean suppliers within the EU. Nonetheless, defensive FDI has given rise to exits through active relocation within and outside the EU, since the ‘late 1980s’due in the main to (1) sensitive reactions against changing EU trade regulations and (2) failures to maintain cost-competitiveness in particular host regions. Along with these trends, chaebols’entries and exits are placed in contingent and paradoxical structures of the global -regional - national-local nexus, which has resulted from the mismatch of different EU policies such as trade, inward investment and regional policies.

• International Area Studies Review
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• v.17 no.4
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• pp.23-42
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• 2013

This paper examines the effects of corporate governance on internationalization in Korean firms. Using the data from 454 Korean manufacturing firms listed in the Korean Stock ExchanFge (KSE) from 1999-2006, we analyzed the role of corporate governance on internationalization in Korean firms, including Chaebols (Korean business groups) and family firms. In addition, we investigated the moderating effect of concentration of ownership on internationalization. The results of the analysis showed a positive association between corporate governance in Chaebols and family firms and internationalization. Interestingly, the influence of ownership concentration overpowered the ambivalent behaviors of Chaebols, leading to less internationalization. We conclude that corporate governance in Chaebols and family firms is important to internationalization strategy.

• Fashion & Textile Research Journal
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• v.23 no.5
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• pp.598-610
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• 2021

Korean textile and fashion companies have played a major role not only in developing the Korean economy since Korea's industrialization started in the early 1960s but also in providing opportunities to form and expand chaebols (conglomerates of family-owned businesses). This study reviewed and analyzed the historical development of chaebols, which started the fiber/textile/fashion business before the 1960s and maintained their chaebol status until 2010. The Samsung, Samyang, Kolon, Taekwang, Hyosung, LG, and SK groups were included in the study, and data were collected from diverse sources, including the publications and websites of the chaebol companies, newspapers, magazines, and research articles. The strategies of the companies at the corporate and group levels were examined based on the corporate lifecycle, which consists of existence, growth, maturity, rebirth, and decline stages. The results showed that all the analyzed companies actively engaged in product line expansion during the growth stage. Vertical integration, especially backward integration, was common during the growth stage. Some groups established new companies to manage additional product lines and integration, while others pursued growth strategies mainly at the corporate level. The rebirth stage occurred in only a few companies and groups. Some seemed to be going through the decline stage, and the rest of the groups exited the textile and fashion business.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.15 no.1
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• pp.86-98
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• 2014

This study examined a long-standing issue with its perverse results in the Korean capital markets, such as any variant financial profiles over time, affecting capital structure for the firms belonging to the chaebols. It may be of interest to identify these components from the perspectives of international investors and domestic policy makers to implement their contingent strategies on the target leverage, since the U.S. financial turmoils in the late 2000s. Regarding the evidence from the three hypothesis tests on the firms in the chaebols, this research found that the control variabels measuring profitability, business risk, and non-debt tax shields, showed their statistically significant relationships with the different types of a debt ratio. While FCFF(free cash flow to the firm) showed its significant influence to discriminate between the firms in the chaebols and their counterparts, not belonging to the chaebols, BDRELY as the ratio of liabilities to total assets, comprising the enhanced 'Dupont' system, only showed its statistically significant effect on leverage in the context of the parametric and nonparametric tests. In line with the results obtained from the present research, one may expect that a firm in the Korean chaebol, may control or restructure its present level of capital structure to revert to its target optimal capital structure towards maximizing the shareholders' wealth.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.16 no.10
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• pp.7118-7125
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• 2015

This study examined one of the concerned or even imperative issues in the field of contemporary finance related to approaching an optimal level of cash holdings for the firms belonging to the chaebols in the Korean domestic capital markets. However, the subject may not have been drawn much attention so far, even if there are still ongoing and active debates among the interest parties at the macro- or micro-level. Two primary hypotheses were postulated to be empirically tested. On the results of the first hypothesis test for the existence of an optimal cash reserves for the sample firms, two estimation techniques were performed in terms of a quadratic regression equation and a relationship between a firm's value and the residuals derived from the static panel date model. As a primary financial implication of the study which may contribute to the practitioners and the academics in finance, the optimal level of cash holdings can be estimated by controlling for the a priori significant components for the sample firms towards maximizing firm value.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.20 no.4
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• pp.232-241
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• 2019

This study examines one of the conventional and controversial issues in modern finance. Specifically, this study identifies financial determinants of corporate R&D intensity for firms belonging to Korean Chaebols. Empirical estimation procedures are applied to derive more robust results of each hypothesis test. Static panel data, Tobit regression and stepwise regression models are employed to obtain significant financial factors of R&D expenditures, while logit, probit and complementary log-log regression models are used to detect financial differences between Chaebol firms and their counterparts not classified as Chaebols. Study results found the level of R&D intensity in the prior fiscal year, market-value based leverage ratio and firm size empirically showed their significance to account for corporate R&D intensity in the first hypothesis test, whereas the majority of explanatory variables had important power on a relative basis. Assuming that the current circumstances in the domestic capital market may necessitate gradual changes of Korean Chaebols in terms of their socio-economic function, the results of this study are expected to contribute to identifying financial antecedents that can be beneficial to attain optimal level of corporate R&D expenditures for Chaebol firms on a virtuous cycle.

• Journal of Venture Innovation
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• v.7 no.1
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• pp.167-182
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• 2024

The aim of this study is to empirically explore the operational spillover effect among companies within chaebol groups, prominent corporate conglomerates in South Korea. Chaebols are known for their horizontal and vertical integration, fostering close collaboration among their constituent companies from a supply chain standpoint. Existing literature highlights the sharing of tangible and intangible resources within chaebol structures, leading to increased efficiency by minimizing transaction costs through resource sharing. This research investigates whether operational management performance within chaebol structures can be transmitted through cooperative resource utilization. To achieve this objective, we categorize leading companies and affiliate companies within chaebols and examine whether the operational management performance of leading companies significantly influences that of affiliate companies. Data on conglomerates, as defined by the Korea Fair Trade Commission, were collected, along with information on companies within these groups. Subsequently, the company with the highest revenue within each group was identified as the leading company, while the remaining companies were designated as affiliate companies. Our analysis reveals a significant positive relationship between the performance of inventory and facility resource management of leading companies and that of affiliate companies. This study sheds light on the transfer of operational management performance within conglomerates from a managerial perspective, underscoring the importance of reinforcing cooperation systems within the chaebol group. Furthermore, this research contributes to the academic discourse by delineating conglomerates from an operational management perspective and empirically demonstrating the transfer effect of operational management performance.