Chaebol

A chaebol is a large industrial South Korean conglomerate run and controlled by an individual or family. A chaebol often consists of multiple diversified affiliates, controlled by a person or group. Several dozen large South Korean family-controlled corporate groups fall under this definition. The term first appeared in English text in 1972.
Chaebol have also played a significant role in South Korean politics. In 1988, a member of a chaebol family, Chung Mong-joon, president of Hyundai Heavy Industries, successfully ran for the National Assembly of South Korea. Other business leaders were also chosen to be members of the National Assembly through proportional representation. Hyundai has made efforts in the thawing of North Korean relations, despite some controversy. Many South Korean family-run chaebol have been criticised for low dividend payouts and other governance practices that favor controlling shareholders at the expense of ordinary investors.

Etymology

"Chaebol" is derived from the McCune–Reischauer romanization of the Korean word 재벌, without the breve above the o. In 2000, the South Korean Ministry of Tourism introduced a new system of converting the Korean language into the Roman alphabet called Revised Romanization. Under the new transliteration style, 재벌 is written as jaebeol, not chaebol. Despite McCune–Reischauer being largely abandoned in South Korea, the term is still ubiquitously written as chaebol.
The word originates from the Sino-Japanese term zaibatsu, where 財 means 'wealth' and 閥 means 'clan'. The Japanese zaibatsu dominated their economy from 1868 until they were dissolved under the American Occupation of Japan in 1945. The rise and proliferation of the Korean chaebol resembles the Japanese zaibatsu at their peak.
The word has been loaned into English since at least 1972.

History

Formation and boom

South Korea's economy was small and predominantly agricultural well into the mid-20th century. However, policies of President Park Chung Hee spurred rapid industrialisation by promoting large businesses, following his seizure of power in 1961. The First Five Year Economic Plan by the government set industrial policy towards new investment, and chaebols were to be guaranteed loans from the banking sector. The chaebol played a key role in developing new industries, markets, and export production, helping make South Korea one of the Four Asian Tigers.
Although South Korea's major industrial programs did not begin until the early 1960s, the origins of the country's entrepreneurial elite were found in the political economy of the 1950s. Very few Koreans owned or managed larger corporations during the Japanese colonial period. After the Japanese left in 1945, some Korean businessmen obtained the assets of some of the Japanese firms, several of which grew into the chaebols of the 1990s.
The Japanese colonial government sometimes sought to co-opt local businessmen and wealthy individuals often linked to land ownership, and a significant minority of industries were jointly owned by Japanese and Korean businesses. A few Korean chaebols, such as Kyungbang, came into existence during this era.
The companies, as well as certain other firms that were formed in the late 1940s and early 1950s, had close links with Syngman Rhee's First Republic, which lasted from 1948 to 1960. It is confirmed that many of these companies received special treatment from the government in return for kickbacks and other payments.
When the military took over the government in 1961, its leaders announced that they would eradicate the corruption that had plagued the Rhee administration and eliminate "injustice" from society. Some leading industrialists were arrested and charged with corruption, but the new government realized that it would need the help of entrepreneurs if the government's ambitious plans to modernize the economy were to be fulfilled. A compromise was reached, under which many of the accused corporate leaders paid fines to the government. Subsequently, there was increased cooperation between corporate and government leaders in modernizing the economy.
Government-chaebol cooperation was essential to the subsequent economic growth and astounding successes that began in the early 1960s. Driven by the urgent need to turn the economy away from consumer goods and light industries toward heavy, chemical, and import-substitution industries, political leaders and government planners relied on the ideas and cooperation of chaebol leaders. The government provided the blueprints for industrial expansion; the chaebol realized the plans. However, the chaebol-led industrialization accelerated the monopolistic and oligopolistic concentration of capital and economically profitable activities in the hands of a limited number of conglomerates.
Park used the chaebol as a means of economic growth. Exports were encouraged, reversing Rhee's policy of reliance on imports. Performance quotas were established.
Chaebols were able to grow because of two factors: foreign loans and special favours. Access to foreign technology also was critical to the growth of the chaebol through the 1980s. Under the guise of "guided capitalism", the government selected companies to undertake projects and channelled funds from foreign loans. The government guaranteed repayment should a company be unable to repay its foreign creditors. Additional loans were made available from domestic banks. In the late 1980s, chaebols dominated the industrial sector and were especially prevalent in manufacturing, trading, and heavy industries.
Chaebols experienced tremendous growth beginning in the early 1960s in connection with the expansion of South Korean exports. The growth resulted from the production of a diversity of goods rather than just one or two products. Innovation and the willingness to develop new product lines were critical. In the 1950s and early 1960s, chaebols concentrated on wigs and textiles; by the mid-1970s and 1980s, heavy, defence, and chemical industries had become predominant. While these activities were important in the early 1990s, real growth was occurring in the electronics and high-technology industries. Chaebols also were responsible for turning the trade deficit in 1985 into a trade surplus in 1986. The current account balance, however, fell from more than US$14 billion in 1988 to US$5 billion in 1989.
Chaebols continued their explosive growth in export markets in the 1980s. By the late 1980s, they had become financially independent and secure, thereby eliminating the need for further government-sponsored credit and assistance.

1990-present

By the 1990s, South Korea was one of the largest newly industrialised countries and boasted a standard of living comparable to industrialized countries.
President Kim Young-sam began to challenge the chaebol, but it was not until the 1997 Asian financial crisis that the weaknesses of the system were widely understood. Initially, the crisis was caused by a speculative attack on the Thai baht, which lead to a sharp drop in its value and immediate cash flow concerns needed to pay foreign debts; widespread foreign investment and financial deregulation across East Asia allowed foreign investors to attack the values of the national currencies of other countries in the region, including South Korea, which spread the financial crisis to the affected countries and caused a downward spiral in the value of the South Korean won. As a result, chaebols, which at this point were overleveraged in short-term debts and already suffering from falling export prices, started going bankrupt: Of the 30 largest chaebols, 11 collapsed during the financial crisis.
The remaining chaebols also became far more specialized in their focus. For example, with a population ranked 26th in the world, before the crisis, the country had seven major automobile manufacturers. Afterward, only two major manufacturers remained intact, though two additional ones continued, in a smaller capacity, under General Motors and Renault. Chaebol debts were not only to state industrial banks but also to independent banks and their financial services subsidiaries. The scale of the loan defaults meant that banks could neither foreclose nor write off bad loans without themselves collapsing, so the failure to service these debts quickly caused a systemic banking crisis, and South Korea turned to the IMF for assistance. The most spectacular example came in mid-1999, with the collapse of the Daewoo Group, which had some US$80 billion in unpaid debt. At the time, it was the largest corporate bankruptcy in history. Investigations also exposed widespread corruption in the chaebols, particularly fraudulent accounting, and bribery.
South Korea recovered quickly from the crisis, and most of the blame for economic problems was shifted to the IMF, which had forced the government to adopt 30% interest rate in exchange for a US$55 billion bailout. The remaining chaebols have grown substantially since the crisis, but they have maintained far lower debt levels.
In 2019, the revenue of the largest chaebol, Samsung, was worth about of the South Korean GDP with the company holding billions of dollars in cash. In 2023, the revenue of the top four chaebols was of the South Korean GDP, and the top thirty chaebol were of GDP.
Recent financial statements show chaebols are slowly losing power due to either international competition or internal competition from startups. The net profit of South Korea's top conglomerates decreased from 2012 to 2015.

Ranking

2025 Rank	2024 Rank	Change	Group Name	Representative	Affiliates 2025	Affiliates 2024	Assets 2025	Assets 2024	Type
1	1		Samsung	Lee Jae-yong	63	63	589.1	571.4	limited assurance
2	2		SK	Chey Tae-won	198	219	363	352.1	limited assurance
3	3		Hyundai Motor	Chung Eui-sun	74	70	306.6	297.4	limited assurance
4	4		LG	Koo Kwang-mo	63	60	186.1	180.5	limited assurance
5	6	1	Lotte	Shin Dong-bin	92	96	143.3	139	limited assurance
6	5	1	POSCO	POSCO	49	47	137.8	133.7	limited assurance
7	7		Hanwha	Kim Dong-kwan	119	108	125.7	122	limited assurance
8	8		HD Hyundai Heavy Industries	Chung Mong-joon	32	29	88.7	86.1	limited assurance
9	10	1	NongHyup	NongHyup	56	54	80.1	77.7	limited assurance
10	9	1	GS	Huh Chang-soo	98	99	79.3	76.9	limited assurance
11	11		Shinsegae	Chung Yong-jin	59	53	63.9	61.9	limited assurance
12	14	2	Hanjin	Walter Cho	42	34	58.2	56.4	limited assurance
13	12	1	KT	KT	47	48	46.3	44.9	limited assurance
14	13	1	CJ	Lee Jay-hyun	66	73	39.4	38.2	limited assurance
15	16	1	LS	Koo Ja-eun	72	67	36	34.9	limited assurance
16	15	1	Kakao	Kim Beom-soo	115	128	34.8	33.8	limited assurance
17	20	3	HMM	HMM	4	5	33.5	32.4	limited assurance
18	17	1	Doosan	Park Jeong-won	24	22	28.2	27.3	limited assurance
19	18	1	DL	Lee Hae-wook	45	45	27	26.2	limited assurance
20	21	1	Jeungheung	Jeong Chang-seon	51	53	26.7	25.9	limited assurance
21	19	2	Celltrion	Seo Jung-jin	9	8	26.7	25.9	limited assurance
22	23	1	Naver	Lee Hae-jin	45	54	25.5	24.7	limited assurance
23	25	2	S-Oil	S-Oil	2	2	24.5	23.8	limited assurance
24	22	2	Mirae-Asset	미래에셋	28	30	23.5	22.8	limited assurance
25	27	2	Coupang	Coupang	16	13	22.3	21.6	limited assurance
26	24	2	Hyundai Department Store	현대백화점	24	27	22.3	21.6	limited assurance
27	49	22	Hankook & Company	Jo Yang-Rae	25	24	21.5	20.9	limited assurance
28	26	2	Booyoung	Lee Joong-geun	21	21	21.5	20.8	limited assurance
29	32	3	Young Poong	Jang Hyung-jin	30	28	20.9	20.3	limited assurance
30	29	1	Harim	Kim Hong-guk	43	45	20	19.4	limited assurance
31	33	2	Hyosung	Cho Hyun-joon	60	57	19.8	19.2	limited assurance
32	38	6	Sinokor	Jeong Tae-soon	28	27	19.5	18.9	limited assurance
33	30	3	SM	Woo Oh-hyun	58	58	18.3	17.8	limited assurance
34	31	3	HDC	Chung Mong-gyu	34	35	17.5	17	limited assurance
35	34	1	Hoban	Kim Sang-yeol	40	39	16.9	16.4	limited assurance
36	53	17	Dunamu	Dunamu	11	12	15.9	15.4	limited assurance
37	36	1	KT&G	KT&G	17	14	15.7	15.3	limited assurance
38	40	2	Kolon	Lee Woong-yeol	45	48	15.2	14.7	limited assurance
39	37	2	KCC	Jeong Mong-jin	13	14	15	14.5	limited assurance
40	35	5	DB	Kim Jun-ki	24	25	14.8	14.4	limited assurance
41	43	2	Nexon	Yoo Jeong-hyeon	23	19	14.5	14.1	limited assurance
42	41	1	OCI	Lee Woo-hyun	24	24	13.8	13.4	limited assurance
43	45	2	LX	Bon-Joon Koo	17	17	12.7	12.3	limited assurance
44	44		SeAH Holdings	Lee Soon-hyung	24	26	12.4	12	limited assurance
45	46	1	Netmarble	Bang Jun-hyuk	31	35	11.8	11.4	limited assurance
46	48	2	E-Land	Park Seong-su	32	31	11.6	11.3	limited assurance
47	39	8	Kyobo	Shin Chang-jae	16	14	11.1	10.8	publicly disclosed corporate group
48	58	10	GM Korea	GM Korea	3	3	10.8	10.5	publicly disclosed corporate group
49	52	3	Daokuwoom	Kim Ik-rae	45	48	10.4	10.1	publicly disclosed corporate group
50	51	1	Kumho	Park Chan-gu	16	14	10	9.7	publicly disclosed corporate group
51	60	9	Daebang	Gu gyo-un	41	42	10	9.7	publicly disclosed corporate group
52	42	10	Taeyoung	Yoon Seyoung	51	82	9.8	9.5	publicly disclosed corporate group
53	54	1	Samchully	Lee Man-deuk	33	47	9.7	9.4	publicly disclosed corporate group
54	56	2	KG	Kwak Jae-sun	26	34	9.6	9.3	publicly disclosed corporate group
55	47	8	EcoPro	Lee Dong-chae	17	23	9.4	9.1	publicly disclosed corporate group
56	57	1	HL	Chung Mong-won	15	13	9.3	9	publicly disclosed corporate group
57	55	2	Dongwon	Kim Namjeong	23	26	8.9	8.6	publicly disclosed corporate group
58	59	1	Amoraepacific	Suh Kyung-bae	15	13	8.7	8.4	publicly disclosed corporate group
59	50	9	Taekwang	Lee Ho-jin	20	20	8.7	8.4	publicly disclosed corporate group
60	64	4	Krafton	Chang Byung-gyu	9	8	8.5	8.3	publicly disclosed corporate group
61	70	9	Global Sae-A Group	Woonggi Kim	23	20	8.3	8	publicly disclosed corporate group
62	61	1	KAI	KAI	4	4	8.1	7.9	publicly disclosed corporate group
63	63		MDM	Moon Joo-hyun	19	15	8	7.8	publicly disclosed corporate group
64	86	22	Sono international	Park Chun-hee	25	23	7.4	7.2	publicly disclosed corporate group
65	62	3	Aekyung	Jang Young-shin	30	31	7.3	7.1	publicly disclosed corporate group
66	67	1	Dongkuk	Jang Se-ju	16	12	7.3	7.1	publicly disclosed corporate group
67	66	1	BS	Lee Ki-seung	66	65	7.3	7	publicly disclosed corporate group
68	65	3	Samyang	Kim Yun	13	13	7.1	6.9	publicly disclosed corporate group
69	-	New	LIG	Koo Bon-sang	18	-	7.1	6.9	publicly disclosed corporate group
70	69	1	Joongang	Hong Seok-hyun	57	54	6.9	6.7	publicly disclosed corporate group
71	72	1	Eugene	Yoo Kyung-seon	63	60	6.8	6.6	publicly disclosed corporate group
72	75	3	Korea HC	Park Jeong-seok	26	24	6.7	6.5	publicly disclosed corporate group
73	77	4	BGF	Hong Seok-jo	19	18	6.3	6.1	publicly disclosed corporate group
74	-	New	Daekwang	Cho Young-hoon	64	-	6.1	5.9	publicly disclosed corporate group
75	83	8	Bando	Kwon Hong-sa	15	18	6.1	5.9	publicly disclosed corporate group
76	78	2	Dashin	Yang Hong-seok	84	117	6	5.9	publicly disclosed corporate group
77	76	1	Okay	Choi Yun	16	16	5.8	5.6	publicly disclosed corporate group
78	79	1	HiteJinro	Park Mun-deok	12	11	5.7	5.6	publicly disclosed corporate group
79	80	1	Nongshim	Shin Dong-won	22	23	5.6	5.5	publicly disclosed corporate group
80	74	6	DN	Kim Sang-heon	7	8	5.6	5.5	publicly disclosed corporate group
81	68	13	Hyundai Marine & Fire Insurance	Jeong Mong-yoon	14	13	5.6	5.4	publicly disclosed corporate group
82	81	1	Shinyoung	Jeong Chun-bo	32	33	5.6	5.4	publicly disclosed corporate group
83	88	5	Paradise	Jeon Philip	11	14	5.4	5.3	publicly disclosed corporate group
84	71	13	IS	Gwon Hyuk-woon	32	36	5.4	5.2	publicly disclosed corporate group
85	85		Hybe	Bang Si-hyuk	12	15	5.4	5.2	publicly disclosed corporate group
86	82	4	Hansol	Jo Dong-gil	21	21	5.4	5.2	publicly disclosed corporate group
87	84	3	Sampyo	Jeong Do-won	28	33	5.3	5.2	publicly disclosed corporate group
88	-	New	Sajo	Joo Jin-woo	40	-	5.3	5.1	publicly disclosed corporate group
89	87	2	Wonik	Lee Young-han	47	54	5.3	5.1	publicly disclosed corporate group
90	-	New	Bithumb	Lee Jeong-hoon	20	-	5.2	5.1	publicly disclosed corporate group
91	-	New	EUKOR	EUKOR	2	-	5.1	5	publicly disclosed corporate group
92	73	19	Youngone	Sung Gi-hak	20	50	5	4.9	publicly disclosed corporate group
-	-	Excluded	Kumho Asiana	Park Sam-gu	-	24	-	17.4	publicly disclosed corporate group