The Graduate School of International Studies (GSIS) at Seoul National University in Seoul and the Vale Columbia Center on Sustainable International Investment (VCC) at Columbia University in New York are releasing the second annual report on leading multinational enterprises (MNEs) from the Republic of Korea (henceforth “Korea”). The research for this report, conducted in 2011 within the framework of an international project on the rapid global expansion of MNEs from emerging markets, covers the period 2008 to 2010.
In 2010, the top 20 Korean multinationals, ranked by their foreign assets (Table 1), jointly held about US$ 86 billion in assets abroad. Hyundai Heavy Industries Co., Ltd. (HHI), a member of a leading Korean chaebol or business group (See Box 1), ranked 1st with slightly over US$ 9.6 billion. It was closely followed by Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME), which had slightly under US$ 9.6 billion, Samsung Heavy Industries Co., Ltd (SHI) with US$ 8.2 billion, LG Display with just over US$ 7 billion, and Hyundai Motors with nearly US$ 7 billion. The top five firms together accounted for almost 50% of foreign assets of the top 20 companies.
In 2010, the foreign sales (including exports) of 15 firms among the top 20 were about US$ 165 billion and 14 of the 20 firms together had 192,018 employees abroad (See Annex Table 1 and Tables 1a, 1b and 1c for details). The top 20 had 778 foreign affiliates (branches, subsidiaries, etc.) in 82 countries. The list includes only one state-controlled firm: Korea Gas Corporation (KOGAS). POSCO, an iron and steel company, was formerly state-controlled but has been privatized and now has only a small stake in state hands. A third firm, DSME, had19% of its shares owned by Korea Asset Management Corporation (KAMCO), a state-owned company, which sold 17% of its shares to Financial Services Commission (FSC) and the rest to other banks in February 2013. The attempts to fully privatize DSME were initiated in 2008 but failed due to unfavorable market conditions; it is planning to do so again in the near future. The remaining firms are all non-state-owned.
There was a drop in both foreign assets and foreign sales of the top 20 MNEs in 2010, the latter being quite substantial. See Table 2 and the discussion immediately preceding it for further details. When it comes to overall Korean foreign direct investment (FDI) flows abroad, however, 2010 was a year of recovery, after a substantial decline in 2009 (See Annex Figure 5).