Chapter 5: The Engine of Catch-Up: Big Conglomerates
1. INTRODUCTION This chapter investigates the engine of export-oriented catch-up in the context of small ﬁrms versus big conglomerates (chaebols) on the basis of the experiences of Korea and Taiwan. Big conglomerates dominate the Korean economy as do smaller ﬁrms (that is, the so-called small and medium-sized ﬁrms) the Taiwan economy. This chapter attempts, ﬁrst, to identify the factors that cause such diﬀerences between the two countries and, second, to investigate their eﬃciency implications. This chapter will present a set of hypotheses that may be tested empirically. My objects are to inspire an analytic framework that enhances our understanding of the engine of catch-up under diﬀerent market conditions, and also to provide a crude guide for policy and institutional arrangements to improve a country’s performance in catch-up. In order to make the messages simple and clear, I will amplify the diﬀerences between Korea and Taiwan, although their diﬀerences may be just matters of degrees. Big conglomerates have served as the engine of growth in Korea. The Korean government has promoted the concentration of economic power in the hands of a small number of conglomerates. The conglomerates in Taiwan are much smaller in size and organizationally very diﬀerent from their Korean counterparts. In Taiwan, large enterprises that manufacture steel, petrochemicals, and so on are mostly owned and operated by the government and supply their products mostly to domestic markets. On the other hand, small ﬁrms have been, on average, exporting more than twothirds of their...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.