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Industrial Organization and Product Quality: Evidence from South Korean and Taiwanese Exports

In: Empirical Studies of Strategic Trade Policy

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  • Dani Rodrik

Abstract

The central focus of this paper is on the relationship between domestic market structure and export performance. It evaluates the hypothesis that more concentrated industrial sectors can achieve more easily the transition from standardized, labor-intensive manufactures to sophisticated, skill intensive products, as such industries are better able to cope with the inevitable reputational externalities involved in producing high-quality goods for foreign markets. South Korea and Taiwan provide a good test of the theory, as they have sharply different market structures. The results of the empirical analysis provide strong support for the hypothesis.

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This chapter was published in:

  • Paul Krugman & Alasdair Smith, 1994. "Empirical Studies of Strategic Trade Policy," NBER Books, National Bureau of Economic Research, Inc, number krug94-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 8681.

    Handle: RePEc:nbr:nberch:8681

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    Cited by:
    1. Deardorff, Alan & Djankov, Simeon, 2000. "Knowledge Transfer Under Subcontracting: Evidence from Czech Firms," World Development, Elsevier, vol. 28(10), pages 1837-1847, October.
    2. Ingeborg Menzler-Hokkanen & Rolf Langhammer, 1994. "Product and country substitution in imports: An empirical comparison of theoretical concepts," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 130(2), pages 309-328, June.
    3. Feenstra, R.C. & Yang, T.H. & Hamilton, G.G., 1993. "Market Structure and International Trade: Business Groups in East Asia," Papers 93-23, California Davis - Institute of Governmental Affairs.
    4. Robert E. Lipsey, 1994. "Quality Change and other Influences on Measures of Export Prices of Manufactured Goods and the Terms of Trade between Primary Products and Manufacture," NBER Working Papers 4671, National Bureau of Economic Research, Inc.
    5. Menzler-Hokkanen, Ingeborg & Spinanger, Dean, 1993. "On the quality of quality measures in international trade," Kiel Working Papers 587, Kiel Institute for the World Economy.
    6. Maurice Kugler & Eric Verhoogen, 2012. "Prices, Plant Size, and Product Quality," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 307-339.
    7. Katherine M. Sauer, 2008. "The quality of parallel imports," Economics Bulletin, AccessEcon, vol. 6(44), pages 1-10.
    8. Bee Yan Aw & Sukkyun Chung & Mark J. Roberts, 2002. "Productivity, Output, and Failure: A Comparison of Taiwanese and Korean Manufacturers," NBER Working Papers 8766, National Bureau of Economic Research, Inc.
    9. Lipsey, Robert E., 1994. "Quality change and other influences on measures of export prices of manufactured goods," Policy Research Working Paper Series 1348, The World Bank.
    10. Fung, K. C., 2002. "International Trade and Bank Groups: Welfare Enhancing or Welfare Reducing?," Journal of the Japanese and International Economies, Elsevier, vol. 16(2), pages 212-226, June.
    11. Herman Hoen & Eliza Leeuwen, 1991. "Upgrading and relative competitiveness in manufacturing trade: Eastern europe versus the newly industrializing economies," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 127(2), pages 368-379, June.

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