chaebol

A chaebol is a large, family-controlled business conglomerate in South Korea. The term combines 'cha' (family) and 'bol' (faction or group). Chaebol are typically organized as a parent company with a network of subsidiaries across diverse sectors, often tied together by cross-shareholding and personal control by founding or appointed family members.

Historically, chaebol emerged in the 1950s–1960s with state-led industrialization. The government directed credit, policy favors, and rapid industrial expansion through these groups, especially in electronics, autos, shipbuilding, and petrochemicals. Their centralized governance and interlocking ownership allowed rapid decision-making, but also concentrated economic power in a few families.

In the Korean economy, chaebol played a crucial role in export growth and modernization, becoming multinational brands such as Samsung, Hyundai, and SK. They often integrate research, manufacturing, distribution, and financing within one group, and maintain close relations with banks and state institutions, which has aided access to capital but invited policy criticism and concerns about governance and competition.

Critics point to concentrated ownership, limited minority rights, debt-driven expansion, and potential conflicts of interest. Reform efforts intensified after the 1997 Asian Financial Crisis, with measures to improve corporate governance, reduce cross-shareholding, and increase board independence. While reforms reduced some power, many chaebol retain substantial control and remain central to Korea's economy and political economy.