SEOUL, KOREA - The Fair Trade Commission said on July 25 that the share of shipments in manufacturing and mining sectors accounted for large corporations was 52.6 percent (785 trillion won) in 2011, up 2.1 percentage points from 2010.

 

The growth rate of output shipments made by large companies was 17.0 percent in 2011, slightly lower than that for 2010. In contrast, the growth rate for the total shipments in manufacturing and mining sectors fell by a large margin to 12.4 percent from 18.0 percent during the same period.

 

Although large business groups were responsible for more than a half of total shipments, their contribution to employment was much lower with 19.7 percent (534,000) in 2011, up 0.7 percentage point from the previous year's 19.0 percent. In addition, the ratio of shipments by affiliates of large business groups in industrial sectors in which they do business rose 90.9 percent in 2011 from 89.6 percent in 2010. The number of industrial sectors the business group-affiliated corporations are involved also increased to 233 (48.9%) from 226 (47.5%) during the same period.

 

This indicates that most large corporations are focused in a relatively narrow area of businesses with high concentration ratios. Indeed, in industrial areas in which any one of the large corporations is ranked top-three operators the market concentration ratio turned out to be higher than in otherwise. In terms of "CR3" (meaning the market share of the three largest firms in an industry), the concentration ratio of the industry in which any of the large companies is part of top-three was 52.9 percent.

 

In contrast, the concentration ratio of an industry in which large corporations have not entered or not part of top-three market dominators was 44.3 percent and 31.0 percent, respectively, implying clearly that the existence of a large firm affiliated with business groups in an industry tend to raise the concentration ratio of the industry.