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Two Different Export-Oriented Growth Strategies: Accumulation and Distribution in Turkey and South Korea

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  • �ZLEM ONARAN
  • ENGELBERT STOCKHAMMER

Abstract

The aim of the paper is to compare the relationship between distribution, growth, accumulation, and employment in Turkey and in South Korea. These countries represent two different cases of export-oriented growth. The results of the structural adjustment experiences of both countries are in striking contrast to orthodox theory; however, they also present counterexamples to each other in terms of policies of economic integration. The paper tests whether accumulation and employment are profit-led in these two countries by means of a post-Keynesian open economy model, which includes a demand-driven labor market and a reserve army effect in the Marxian sense. The model is estimated in a structural vector autoregression (SVAR) form in order to capture the complex simultaneous interaction between distribution, accumulation, growth, and employment within a systems approach. This model, and the method of estimation, are the two innovations of this paper in addressing the crucial policy issues related with structural adjustment problems in developing countries. The results show that decreasing the wage share does not stimulate accumulation, growth, and employment. Interestingly, the relation between wage share, investment, growth, and employment is similar in both Turkey and South Korea; however, the former experienced low and the latter high growth rates due to different export-oriented growth strategies. The explanation for this difference is found in the field of institutions, power structures, and state policies.

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Bibliographic Info

Article provided by M.E. Sharpe, Inc. in its journal Emerging Markets Finance and Trade.

Volume (Year): 41 (2005)
Issue (Month): 1 (January)
Pages: 65-89

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Handle: RePEc:mes:emfitr:v:41:y:2005:i:1:p:65-89

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Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=111024

Related research

Keywords: accumulation; distribution; export-oriented growth; post-Keynesian economics; structural adjustment;

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Cited by:
  1. Engelbert Stockhammer & Robert Stehrer, 2011. "Goodwin or Kalecki in Demand? Functional Income Distribution and Aggregate Demand in the Short Run," Review of Radical Political Economics, Union for Radical Political Economics, vol. 43(4), pages 506-522, December.
  2. Ozlem Onaran, 2004. "Life After Crisis For Labor And Capital in the Era of Neoliberal Globalization," Working Papers geewp43, Vienna University of Economics Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
  3. Luis N. Lanteri, 2013. "Determinantes económicos del nivel de empleo. Alguna evidencia para Argentina," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 73-100, May.
  4. Dominique Peters, 2010. "Price Competitiveness in Central and Eastern Europe - a case study for transition economies," IMK Studies 01-2010, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  5. Özlem Onaran, 2006. "Speculation-led growth and fragility in Turkey: Does EU make a difference or "can it happen again"?," Department of Economics Working Papers wuwp093, Vienna University of Economics, Department of Economics.
  6. Ozlem Onaran, 2009. "Wage share, globalization and crisis: the case of the manufacturing industry in Korea, Mexico and Turkey," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(2), pages 113-134.
  7. Eckhard Hein & Lena Vogel, 2007. "Distribution and growth reconsidered - empirical results for Austria, France, Germany, the Netherlands, the UK and the USA," IMK Working Paper 03-2007, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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