Emergent Economies, Divergent Paths Book contents
- Frontmatter
- Contents
- Acknowledgments
- Introduction
- Part I Business Groups and Economic Organization
- Part II Emergence and Divergence of the Economies
- Conclusions
- Appendix A Mathematical Model of Business Groups
- Appendix B Examples of Differential Pricing Practices of Korean Groups
- Appendix C Hypothesis Tests of the Model
- Appendix D The Role of Debt in the Korean Financial Crisis, 1997
- References
- Index
- Titles in the series
Appendix B - Examples of Differential Pricing Practices of Korean Groups
Published online by Cambridge University Press: 24 July 2009
- Frontmatter
- Contents
- Acknowledgments
- Introduction
- Part I Business Groups and Economic Organization
- Part II Emergence and Divergence of the Economies
- Conclusions
- Appendix A Mathematical Model of Business Groups
- Appendix B Examples of Differential Pricing Practices of Korean Groups
- Appendix C Hypothesis Tests of the Model
- Appendix D The Role of Debt in the Korean Financial Crisis, 1997
- References
- Index
- Titles in the series
Summary
In Chapter 3, we refer to investigations by the Korea Fair Trade Commission dealing with differential pricing practices within Korean chaebol. Several such cases are summarized subsequently.
Case 1. Goldstar Cable Ltd.
Source: The Korea Fair Trade Commission (1994), “A Case on the Illegal Internal Transactions of Goldstar Cable Ltd. Co.,” Proceedings of Fair Trade Commission Decisions, No. 94-242.
According to the source, Goldstar Cable, an affiliate of Lucky-Goldstar group, favored its affiliates over non-affiliate firms in trading various commodities in 1993. It sold its products to affiliate buyers at much lower prices than to non-affiliate buyers (see Table B.1). It also preferentially treated its affiliates by buying their products at significantly higher prices than from other firms (see Table B.2). Table B.1 shows that Goldstar Cable sold electrical wires to Goldstar, its affiliate, at below-market price by 9.6–29.6 percent; it sold high voltage cables to Kukje Cable, its affiliate, at lower prices than to non-affiliate buyers by 1.1–9.1 percent; it sold electrical chillers to Lucky Engineering, its affiliate, at lower prices than to non-affiliates by 16.7–35.9 percent; it sold electrical connectors to Goldstar, its affiliate, at significantly lower prices than to the other non-affiliate buyer by 21.9–24.8 percent; and it sold coated wires to Kukje Cable, its affiliate, at lower prices than to non-affiliate buyers by 4.5–15.9 percent.
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- Information
- Emergent Economies, Divergent PathsEconomic Organization and International Trade in South Korea and Taiwan, pp. 391 - 395Publisher: Cambridge University PressPrint publication year: 2006