April 20, 2024

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[THE INVESTOR] Korea’s 31 largest groups accounted 66 percent of the total exports last year, according to the Korea Economic Research Institute on Aug. 20.

Exports by a total of 186 listed companies belonging to the largest 31 groups under the Fair Trade Commission’s antitrust watch list took up 494 trillion won or 66.3 percent of the total exports of the country last year, up from 62.1 percent in 2016 and 63.7 percent in 2015. 

Large business group designated by the country’s antitrust watchdog are restricted from mutual investments and inter-affiliate loan guarantees.

They also took up 70 percent of the total equipment investment of 189.8 trillion won while occupying 45.5 percent of research and development expenses.

“We can say their investments in equipment last year contributed to a GDP growth of 3.1 percent, considering their contribution grew from 55.4 percent in 2014 to 71.4 percent,” KERI said in a statement on Aug. 20.

The institute also pointed out that these companies, which hold 60 percent of the total market cap, provided opportunities for wealth growth for individual investors. “Return from the stock market in the last decade was an average of 8.8 percent a year, which compares with a 3.7 percent annualized return from the property market and 4.9 percent from the bond market,” it said.

The 186 companies’ market capitalization stood at 1127.2 trillion won (US$1 trillion) or 59.5 percent of the total market capitalization, as of end-2017.

“To achieve the goal for innovative growth, the government needs to review different restrictive policies applied to companies by their size of business and try to make a more free environment for investment,” Yoo Hwan-ik, head of Innovative Growth at KERI said.
By Park Ga-young (gypark@heraldcorp.com)