This study provides theoretical and empirical analyses of the Korean market structure and fair trade practices, with an objective of identifying the issues in the current anti-monopoly regime and suggesting possible improvements.
In the mid-1960s, the number of jobs and the output of the Korean manufacturing sector grew exponentially, while the number of businesses remained fairly stable. Indeed, some of the smaller businesses eventually shut down, while others became very large.
The conglomeratization of manufacturing has strengthened the monopolistic and oligopolistic tendencies in Korea’s pattern of economic growth. Under the “growth-first” policy, the Korean government encouraged businesses to expand, concentrating support and resources in larger corporations early, so as to accumulate the pools of capital necessary to sustain and fuel Korea’s industrialization. The capital-intensive nature of technology acquisition heavily favored businesses that had a head start in expanding and acquiring new technologies, and ultimately facilitated the monopolization of the market by a few early-starting conglomerates. Whether fostered through policy means or arising spontaneously, the monopolistic practices of a few large conglomerates now threaten to distort the market functions and conditions.
Monopoly can undermine a nation’s economy by facilitating inflation and concentrating profits in the monopolistic few, while denying fair market access to the rest. Korea’s fair trade laws and anti-monopoly regulations tend to be looser than those of the United States and Japan. Consequently, large conglomerates in Korea have been able to maintain their monopolistic practices. The Korean government needs to enforce stricter regulations and laws, particularly with respect to the monopolistic practices that affect costs of production, inhibit market competition, and compromise the fairness of transactions, as these practices can severely destabilize the market.
This study concludes that the monopolistic practices in the Korean manufacturing sector exist as structural factors behind the continued inflation. Monopolistic market participants tend to charge higher prices in pursuit of greater profits. This is a problem that must be solved in order to ensure long-term viability and growth of the Korean economy.
시장구조와 독과점규제(Market structure and anti-monopoly regulations: the case of the Korean manufacturing sector)
한국의 제조업을 중심으로
|Series Title; No||연구총서|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Economic System|
|Holding||KDI; KDI School|