Advanced Search
MyIDEAS: Login to save this article or follow this journal

Changing Performance of Business Groups over Two Decades: Technological Capabilities and Investment Inefficiency in Korean Chaebols


Author Info

  • Kineung Choo
  • Keun Lee
  • Keunkwan Ryu
  • Jungmo Yoon
Registered author(s):


This article differentiates itself from the large volume of existing literature on business groups, such as Korean chaebols, in several aspects. First, it uses productive efficiency rather than financial efficiency as a performance measure. Second, it defines chaebols in three alternative ways and checks whether the results are robust. Third and most important, it explains the sources of the post-crisis change in the performance of Korean chaebols in terms of technological capabilities and investment inefficiency. This study finds that chaebols have become more efficient than non-chaebols in the post-crisis period compared with the pre-crisis period, that inefficiency in investment has always been critical in determining productive inefficiency, and that after the 1997 financial crisis Korean chaebols have improved their performance by reducing investment inefficiencies and enhancing technological capabilities. The results of this study are consistent with the often-acknowledged advantages of business group firms: first, technological capabilities can be shared among affiliated firms; and second, technological capabilities can be combined with project- or entry-execution capability. This article also shows that, with globalization and liberalization, technological capabilities have emerged to be more important in recent years than in the past when what was more important was exploiting market imperfections and artificial rents. (c) 2009 by The University of Chicago. All rights reserved..

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 57 (2009)
Issue (Month): 2 (01)
Pages: 359-386

as in new window
Handle: RePEc:ucp:ecdecc:v:57:y:2009:i:2:p:359-386

Contact details of provider:
Web page:

Related research



No references listed on IDEAS
You can help add them by filling out this form.


Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Lee, Keun, 2009. "How Can Korea be a Role Model for Catch-up Development?: A .Capability-based View," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  2. LEE, Keun & CHOO, Kineung & Yoon, Minho, 2013. "Comparing the Productivity Impacts of Knowledge Spillovers from Network and Arm’s Length Industries:Findings from Business Groups in Korea," IIR Working Paper 13-15, Institute of Innovation Research, Hitotsubashi University.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:ucp:ecdecc:v:57:y:2009:i:2:p:359-386. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.