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A Comparative Study of Development Mechanisms in Korea and Taiwan: Introductory Analysis

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  • Hattori, Tamio
  • Sato, Yukihito

Abstract

This article is the introduction to a special issue of The Developing Economies which presented the results of a research project by the Institute of Developing Economies that examined the development mechanisms in Korea and Taiwan. Our conclusion in this article is that their development mechanisms, despite their similar development patterns of export-led industrialization, have been essentially different: a government-led mechanism in Korea as opposed to a market-led mechanism in Taiwan. We verified this difference through comparative studies of the two economies covering trade balances, the growth of total factor productivity, the scale of enterprises and business groups, and the development processes of individual manufacturing sectors. In our explanatory discussion we propose that the difference in the mechanisms is based on: 1) the amount of accumulation in the economy at the time postwar industrialization started, 2) the relationship between government and society, and 3) the mechanism of social network formation.

Suggested Citation

  • Hattori, Tamio & Sato, Yukihito, 1997. "A Comparative Study of Development Mechanisms in Korea and Taiwan: Introductory Analysis," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 35(4), pages 341-357, December.
    • Handle: RePEc:jet:deveco:v:35:y:1997:i:4:p:341-357
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    References listed on IDEAS

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    1. Bela Balassa, 1971. "Industrial policies in Taiwan and Korea," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 106(1), pages 55-77, March.
    2. Levy, Brian & Kuo, Wen-Jeng, 1991. "The strategic orientations of firms and the performance of Korea and Taiwan in frontier industries: Lessons from comparative case studies of keyboard and personal computer assembly," World Development, Elsevier, vol. 19(4), pages 363-374, April.
    3. Kawakami, Momoko, 1996. "Development of the Small- and Medium-Sized Manufacturers in Taiwan's PC Industry," Discussion Papers 256176, Chung-Hua Institution for Economic Research.
    4. Mody, Ashoka, 1990. "Institutions and Dynamic Comparative Advantage: The Electronics Industry in South Korea and Taiwan," Cambridge Journal of Economics, Oxford University Press, vol. 14(3), pages 291-314, September.
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    Cited by:

    1. Francisco Garcia-Blanch, 2001. "An Empirical Inquiry into the Nature of South Korean Economic Growth," CID Working Papers 74A, Center for International Development at Harvard University.
    2. Tsangyao Chang & WentRong Liu & Michael Thompson, 2002. "The Viability of Fiscal Policy in South Korea, Taiwan, and Thailand," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0209, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

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    More about this item

    Keywords

    Economic development; Private companies; Industrial management; Industrial policy; Korea; Taiwan; 経済発展; 民間企業; 企業経営; 産業政策; 韓国; 台湾;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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