The Federation of Korean Industries said marginal companies accounted for 27.6 percent of Korea's listed firms in 2025, up 15.8 percentage points from 11.8 percent in 2017.
A marginal company is defined as a firm whose interest coverage ratio, calculated by dividing earnings before interest and taxes by interest expenses, stays below 1 for three straight years.
Korea’s added the most among six major economies in FKI study on listed companies in Korea, the United States, Japan, Germany, Britain and France.
The United States had the highest marginal company ratio at 30.7 percent in 2025, followed by Korea at 27.6 percent and France at 26.4 percent.
But Korea posted the largest increase over the nine-year period. The U.S. ratio rose 9.5 percentage points from 21.2 percent in 2017 to 30.7 percent in 2025, while France gained 5.5 percentage points, Britain 2.8 percentage points, Germany 2.3 percentage points and Japan 1.9 percentage points.
The FKI said it used the 8-year - from 2017 to 2025 - period to avoid distortions from global shocks in 2015 and 2016, including China’s stock market turmoil, commodity price swings and Brexit-related uncertainty.
Korea also ranked second in the share of temporary marginal companies, defined as firms with an interest coverage ratio below 1 in a given year.
The ratio of temporary marginal firms in Korea reached 43.9 percent in 2025, just below the U.S. figure of 44.0 percent but higher than France’s 40.1 percent, Britain’s 36.7 percent, Germany’s 27.0 percent and Japan’s 9.8 percent.
Korea’s temporary marginal company ratio has remained above 40 percent for three straight years, rising from 41.8 percent in 2023 to 43.7 percent in 2024 and 43.9 percent in 2025.
The weakness was more pronounced on the tech-heavy KOSDAQ market.
The marginal company ratio among KOSDAQ-listed firms reached 32.6 percent in 2025, nearly double the KOSPI’s 16.7 percent.
The KOSDAQ ratio rose 19.5 percentage points from 13.1 percent in 2017, while the KOSPI ratio increased 7.1 percentage points from 9.6 percent.
By industry, Korea’s arts, sports and recreation sector had the highest marginal company ratio at 60.0 percent in 2025.
It was followed by professional, scientific and technical services at 36.8 percent, wholesale and retail at 36.4 percent, information and communications at 32.5 percent, manufacturing at 25.6 percent and construction at 23.6 percent.
The largest increase since 2017 was seen in professional, scientific and technical services, where the ratio jumped 30.0 percentage points from 6.8 percent to 36.8 percent.
The information and communications sector rose 19.6 percentage points, wholesale and retail 18.6 percentage points and manufacturing 14.4 percentage points over the same period.
“The rapid rise in Korea’s marginal listed companies suggests that business conditions have deteriorated in major industries other than semiconductors, amid worsening trade conditions, higher exchange rates, raw material and labor costs, and weak domestic demand,” said Lee Sang-ho, head of the FKI’s economic division.
Lee said stronger institutional support is needed to restore corporate vitality and competitiveness.
The analysis was based on Capital IQ data as of June 5, covering 2,558 listed firms in Korea, 3,817 in the United States, 3,739 in Japan, 1,155 in Britain, 332 in Germany and 690 in France. Financial companies, real estate investment trusts, funds, exchange-traded funds and special purpose companies were excluded.
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