Only two Korean companies, Samsung Electronics and Korea Electric Power Corporation (KEPCO), have made it to the top 500 companies by market capitalization, data compiled by Bloomberg show. It’s a sharp drop from 8 in 2005.
The number of Chinese companies in the top 500 has surged four-fold to 60 in 2015 from 15 in 2005. Though Japan has seen the number dwindle to 33 from 57 during the same period, the number has been on the rise in recent years.
As a result, the share of Korean companies in the top 500 by market capitalization has plunged to 0.5%.
By industry, four Korean companies from four different sectors had made the top 500 in 2014: an automaker (Hyundai Motor), an electric power company (KEPCO), a memory chip maker (SK Hynix) and an electronics maker (Samsung Electronics).
Meanwhile, 17 Japanese companies (in the sectors of automobile, banking, electronic equipment and pharmaceuticals) and 16 Chinese companies (in the sectors of automobile, banking, insurance, Internet services, etc.) made the top 500 in 2014, greatly dwarfing S. Korea.
“In terms of market capitalization and the distribution of industrial core competencies, the gap between S. Korean companies and their counterparts in China and Japan has appreciably widened, raising fears over an ‘industrial cliff,’” said Kwon Tae-shin, President of Korea Economic Research Institute (KERI).
“S. Korean companies have to make long-term investment decisions to successfully reorganize their businesses. To that end, building a sustainable management environment is a must,” Kwon added.
