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  • P-ISSN 1738-656X
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한국개발연구. Vol. 13, No. 2, August 1991, pp. 69-96

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Analysis of Actual Condition on Subcontracting System in Korean Automotive Industry (Written in Korean)

김주훈; 조관행

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Economic circumstances of enterprise began to change after a series of democratization measures in 1987. Accompanied with it, competitive advantage of enterprise began to change as well. By that time Korean enterprises had a competitive advantage based on low wages of labor. Abrupt and steady upsurge in wage, however, weakened competitive advantage based on low wages, upward revaluation of won currency caused by surplus in BOP strengthened upward trend in price increase of export products. An urgent problem in Korea economy is, therefore, to find 'new' competitive advantage. For the time being preserving competitiveness based on cost advantage must inevitably remain our basic strategy in industrial policy. While cost advantage in the past referred to low wage level, this cost advantage must have foundation on the improvement in producing technology, which will increase labor productivity and decrease unit cost of products. Besides, other measure to improve competitiveness can be considered such as increasing the extent of production automation, self-development of new products, and spread and strengthening subcontracting system among various enterprises. In this paper we tried to perceive how subcontracting system as a form of intercompany division of labor operates and to which direction this system proceeds responding to the recent changes in economic circumstances. Speaking more concretly, we tried to perceive how large the gap of bargaining power between mother-company and subcontracting company is and how effectively subcontracting company's technical power contributes to mother-company. Facing up to weakening of competitiveness, how stably is the partnership between mother-company and subcontracting company established and what measures are being prepared to retore the weakened competitiveness. In conclusion the result of investigation through the questionnaire on subcontracting system is positive, from which we can infer the optimistic view of restoring Korean economy's competitiveness.

JEL Code

L22, M21, L62

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