A Surge in Korean Top Five Business Groups’ Overseas Firms

It has been informed that the top five conglomerates received loans from financing companies, and they are reportedly reducing the number of firms in Korea and setting up more companies overseas.

This trend has alarmed some with concerns of industrial hollow-out and a decline in job openings.

According to the Financial Supervisory Service, the number of domestic companies owned by the top five business groups including Samsung, LG, Hyundai Motors, SK, and Hanjin has been reduced from 221 as of last April to 219 as of April 30.

On the other hand, overseas companies owned by those conglomerates amounted to 487, up by 52 from last year’s 435.

Samsung and SK established 13 more companies overseas over the last year. Hyundai Motors followed with 11, LG with nine, and Hanjin with six companies.

Only Hyundai Motors set up three new companies at home over the last year, and LG disposed of four whereas SK closed one of their firms at home. Samsung and Hanjin maintained last year’s level.

Mr. Oh Moon-suhk, the executive director of LG Economic Research Institute, said, “Those business groups are moving their manufacturing base overseas to places like China and it does not appear to be a one-time trend,” and that, “This may lead to a decline in the employment rate and worsen the youth employment problem.”

Keuk-In Bae bae2150@donga.com