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Entrepreneurial Development in Late Industrialization: A Comparative Analysis

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  • Yoon Chang-Ho

Abstract

The paper examines the differences in entrepreneurial responses that arise from the different historical backgrounds and transactional efficiency of the market. Beginning from a brief survey of the comparative study of early privatization policies and industrial organizations between Korea and Taiwan, we examine Formation of entrepreneurship in a general equilibrium framework with fixed set-up costs. We show that as the fixed set-up costs increase, the number of active entrepreneurs decreases, while the remaining risk-neutral entrepreneurs adopt riskier technologies and increase the expected level of employment. By examining industry dynamics, we explain why the growth pattern of some newly industrializing economies like Korea shows increasing volatility over the sustained period of time.

Suggested Citation

  • Yoon Chang-Ho, 1999. "Entrepreneurial Development in Late Industrialization: A Comparative Analysis," International Economic Journal, Taylor & Francis Journals, vol. 13(2), pages 1-20.
    • Handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:1-20
    DOI: 10.1080/10168739900000033
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    References listed on IDEAS

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    1. Sudipto Bhattacharya & Dilip Mookherjee, 1986. "Portfolio Choice in Research and Development," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 594-605, Winter.
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    3. 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.
    4. Kanbur, S M, 1979. "Of Risk Taking and the Personal Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 769-797, August.
    5. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    6. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-748, August.
    7. Leff, Nathaniel H, 1979. "Entrepreneurship and Economic Development: The Problem Revisited," Journal of Economic Literature, American Economic Association, vol. 17(1), pages 46-64, March.
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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.

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