This book relies largely on the database built by the Korea Investor's Service (KIS). The Korea Information Service is a leading credit rating agency in Korea, equivalent to Standard & Poors or Moody's, both of which collect, analyze, and evaluate corporate financial data. It collaborates with Moody's to supply information on Korean companies for an international audience.

The Korea Information Service's corporate information database includes financial information not only for companies listed in the stock exchanges and registered for securing promissory notes but also every company with assets of more than 6 billion won from 1985 onward. All Korean firms meeting this condition have to be audited by third-party accounting firms and are thus called ‘statutory audited companies.' For instance, the database includes financial information for 641 listed companies and 3,411 statutory audited companies in nonfinancial sectors as of 1996. Financial services firms are not used in the statistical analyses in this book since their accounting data are not compatible with those of firms in other industries.

This book also identified the business group membership of our sample firms. The Korean Fair Trade Commission (KFTC) legally defines a business group as “a group of companies, more than 30% of whose shares are owned by some individuals or by companies controlled by those individuals. and whose management such as appointing officers is substantially affected.” Because ownership is widely dispersed, chaebol families can control some public firms even when the combined family and affiliate ownership is below 30%.