This paper attempts to analyze how bargaining power induces polarization of profitability between large corporations and SMEs and whether such widening of the profit gap can harm economic growth. A simple theoretical model and empirical analyses of the Korean manufacturing industry are employed. Theoretically, a technology adoption model demonstrates that the unfair deepening in the allocation of bargaining power can exacerbate the profit gap and, in fact, harm economic growth. These findings are complemented by empirical analyses of the Korean manufacturing industry: a regression analysis suggests a negative relationship between the bargaining power of large corporations and economic growth and provides evidence that large corporations exploit SME rents from R&D investment.
To address polarization, proper allocation of bargaining power, which is induced by fair trade, will be crucial. Specifically, if the technology trade and M&A markets, as well as the marketing of SMEs' new technology to foreign markets, are invigorated, the value of new technology would be acknowledged fairly and realistically. SMEs possessing new technology would then maintain adequate bargaining power, not only reducing the profit gap but also boosting overall economic growth.
대, 중소기업간 수익성 양극화와 경제 성장(An analysis of the polarization of profitability between large corporations and small-and medium-sized enterprises(SMEs) and economic growth)
기업간 협상력(bargaining power) 변화를 중심으로
|Series Title; No||금융조사보고서 / 2009-02|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||한국금융연구원; KDI 국제정책대학원|