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Institutions and Dynamic Comparative Advantage: The Electronics Industry in South Korea and Taiwan

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  • Mody, Ashoka

Abstract

If development proceeds by stages, then Taiwan (as a more developed economy) should have preceded South Korea into high technology (capital--and knowledge intensive) production. In fact, Korea has overtaken Taiwan in many respects. The resolution of the paradox is traced principally to differences in industrial and firm structures in the two countries. The conglomerate organizational mode in Korea has permitted entry into many markets; the smaller Taiwanese firms have been unable to sustain themselves in these markets. As there firms head onto the 1990s, the limitations of their present industrial structures presage a possible convergence, with each moving towards the other. This paper suggests the importance of studying flexible institutional response, and particularly the inner workings of a firm, as an integral element of a theory of dynamic comparative advantage. Copyright 1990 by Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal Cambridge Journal of Economics.

Volume (Year): 14 (1990)
Issue (Month): 3 (September)
Pages: 291-314

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Handle: RePEc:oup:cambje:v:14:y:1990:i:3:p:291-314

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Cited by:
  1. 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.
  2. Aw, B. -Y. & Hwang, A. R., 1995. "Productivity and the export market: A firm-level analysis," Journal of Development Economics, Elsevier, vol. 47(2), pages 313-332, August.
  3. Sato, Yukihito, 1997. "Diverging Development Paths of the Electronics Industry in Korea and Taiwan," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 35(4), pages 401-421, December.
  4. Mathews, John A. & Cho, Dong-Sung, 1999. "Combinative capabilities and organizational learning in latecomer firms: the case of the Korean semiconductor industry," Journal of World Business, Elsevier, vol. 34(2), pages 139-156, July.
  5. Mody, Ashoka, 1999. "Industrial policy after the East Asian crisis - from"outward orientation"to new internal capabilities?," Policy Research Working Paper Series 2112, The World Bank.

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