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An analysis of corporation-SME polarization

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“The growing productivity gap between large corporations and SMEs stems from work force cuts, not increased levels of value added by larger companies. They are using their superior bargaining power to organize a division of labor between companies that allows for both high productivity and high wages.”
Ⅰ. The Polarization Controversy
The term “shared growth” has recently come into common parlance in Korea. The fact that it has caught on so successfully is indicative of the widespread perception that SMEs are backwards and stunted in their growth. Large corporations, in contrast, are seen as having risen from their government-assisted beginnings to outpace SMEs by an ever-widening margin, gaining momentum in their growth from an increasingly entrenched market economy. They are also viewed as prone to taking advantage of their superior bargaining power to avoid guaranteeing SMEs a fair return for their efforts. The recent measures adopted to alleviate polarization in Korea are understood to have their origins in a belief that non-market measures are absolutely essential, as this gap will continue to grow relentlessly if matters are left purely to the market economy. But industry data from the past two decades raise fundamental questions as to whether these premises are even accurate. This paper examines the specific meaning of “polarization” in terms
* This is the translated version of KDI FOCUS released on April 30, 2012.
KDI FOCUS
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Full Text
Title An analysis of corporation-SME polarization
Similar Titles
Material Type Reports
Author(English)

Kim, Joo-hoon

Publisher

Seoul:Korea Development Institute

Date 2012-08
Series Title; No KDI Focus / 16
Pages 7
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Economic Administration
Holding Korea Development Institute