Chaebols in the Korean Economy

Chaebols have been driving forces of the Korean economy by aggressively diversifying businesses and developing technological capabilities. They have retained the best-qualified people, absorbed the majority of national R&D resources and most of technology transferred from abroad and diffused it across subsidiaries, and globalized their R&D activities.

The Korean chaebol system is the direct outcome of the industrial policy of the Korean government. Chaebols with sufficient manpower and capital had expanded rapidly. The rapid expansion of chaebols was closely linked with the centralized financing mechanism supported by the government. The nature of the relationship between the state and chaebols was reciprocal...

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