The South Korean economy’s imbalanced growth hinging on a few chaebol names worsened with revenue from top 10 companies last year amounting to nearly half of the country’s gross domestic product (GDP).
According to Seoul-based corporate evaluation website CEO Score on Wednesday, Korea’s 10 largest corporations reported combined sales of $677.8 billion last year, tantamount to 44.2 percent of Korea’s GDP of $1.53 trillion in 2017.
Korean economy’s dependence on large businesses has increased in recent years with the country’s top 10 corporations’ revenue against GDP last year gaining by 2.8 percentage points from two years earlier.
The top line of Japan’s top companies was equivalent to 24.6 percent of the country’s GDP, decreased from 25.1 percent in 2015. In the U.S., the ratio was 11.8 percent last year, unchanged from two years ago.
Two household corporate names Samsung Electronics Co. and Hyundai Motor Co. alone represented one-fifth of the economy. Samsung Electronics maintained an outsized presence with its 2017 revenue of $224.2 billion tantamount to 14.6 percent of GDP. Hyundai Motor came second with a share of 5.9 percent, LG Electronics Inc. with 3.8 percent, Posco with 3.7 percent, and Korea Electric Power Corp. with 3.7 percent.
In contrast, top U.S. company Walmart Inc.’s revenue was equivalent to 2.6 percent of U.S. economy last year. In Japan, the largest Toyota Motor Corp.’s contribution to GDP was 5.7 percent last year.
Given that a company’s revenue and a country’s GDP are measured on different bases, direct comparison of the two may be somewhat inaccurate but the data nevertheless underscores Korea’s over-reliance on a few large companies, according to industry observers.
By Park Joon-hyung and Cho Jeehyun
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]