How did the growth of chaebols affect smaller South Korean businesses?

The growth of chaebols—the large, family-controlled conglomerates that dominate the South Korean economy—has significantly impacted smaller businesses in several ways:

• Financial Disadvantage: Because the South Korean government historically prioritized support for the large-scale projects of chaebols, it became increasingly difficult for smaller, privately managed industries to secure financing.1
• Dependency: Many small and medium-sized enterprises were forced into roles as dependent subcontractors for the chaebols, limiting their autonomy and growth potential.1
• Unfair Competition: Critics argue that the chaebol culture has created an unfair playing field for smaller businesses, stifling creativity and concentrating capital in the hands of a few economic giants.2

While the cooperation between the government and these conglomerates is credited with fueling South Korea’s rapid economic transformation, this model has been widely criticized for fostering monopolies and excluding smaller firms from equitable opportunities.21