Imbalanced Economy
According to FnGuide, the 155 listed companies with a market consensus for the fourth quarter of last year are estimated to have recorded 27.5154 trillion won (US$25.3951 billion) in operating profits during the same period.
The combined estimate of Samsung Electronics (5.2 trillion won, US$4.8 billion), Hyundai Motor Company (2.0102 trillion won, US$1.8553 billion), Kia Motors (701.8 billion won, US$647.7 million), and Hyundai Mobis (852.7 billion won, US$787.0 million) reaches 8.7647 trillion won (US$8.0893 billion), which is 31.85 percent of the total. The ratio was 52.46 percent in the last quarter of 2013, and 28.58 percent in the third quarter of 2014.
Samsung Electronics accounts for approximately 18.9 percent of the total. The ratio had dropped to 16.58 percent in the third quarter of 2014, when it had had to struggle to compete with Apple and Chinese manufacturers. The ratio of the other three is expected to have gone up from 11.99 percent to 12.95 percent between the third and fourth quarters of last year.
The presence of the four companies, which are flagship companies of Samsung and Hyundai Motor groups, is huge in the Korean economy. According to CEO Score, the Samsung and Hyundai Motor Groups represented 35 percent of Korea’s GDP and 21 percent of its corporate tax income from 2008 to 2012. The percentages are likely to be higher when their partner firms are taken into account.
Still, concerns are growing over the imbalance of the Korean economy, too. Since the global financial crisis, the gaps have widened between corporations and households, and between big businesses and small firms, and, more recently, even the conglomerates themselves are undergoing polarization. In particular, those only doing business in the domestic market, which is losing steam these days, are being affected by the trend.