○ Since the Asian Financial Crisis, there has been increasing M&A activity in Korea as a
means to achieve corporate restructuring, and in the near future, there is a need to actively
encourage M&As to improve corporate productivity and industrial competence.
○ Examining the M&A intensity by industry, which measures the relative vitality of the M&A
market:
- M&A intensity in the manufacturing sector, while remaining above the industry average,
rose to five times the industry average after the Asian Financial Crisis and showed a
declining trend afterwards, but has been growing again since 2003.
- In the service sector, represented mainly by telecommunications, insurance/finance, and
construction sectors, M&A intensities remain above the industry average, while the M&A
intensities in the retail and food & accommodation sectors remain far below the industry
average.
○ Labor productivities in high M&A intensity sectors such as manufacturing,
telecommunications, and insurance/finance were higher than those in the retail and food &
accommodation sectors, where M&A intensities were low.
- According estimates by sector in Korea, M&A intensity has both short- and long-term
positive effects on labor productivity.
○ An industry’s M&A activity improves the labor productivity in such sectors, and hence,
there is a need to consolidate institutional frameworks to vitalize the M&A market and
improve industrial competence.
- The authorities should strengthen their support for cross-border M&As by enlarging
domestic M&A-related institutions, cutting bureaucratic red tape, establishing a system for
evaluating enterprise values, and training M&A experts.