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Catching-Up, Crisis and Industrial Upgrading. Evolutionary Aspects of Technological Learning in Korea's Electronics Industry

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Author Info

  • Dieter Ernst

Abstract

This paper addresses a puzzle: How is it possible that a country that has established a broad, export-oriented industrial base at record speed, remains vulnerable to the vicissitudes of international finance and currency markets? I argue that the Korean model that was tremendously successful for catching-up, has now reached its limits. The analysis centers on the co-evolution of industry structure and firm behavior. The focus is on the role of technological learning for the development of the electronics industry, a main carrier of Korea´s successful late industrialization. It is shown that a heavy reliance on credit and an extremely unbalanced industry structure have given rise to a narrow knowledge base and a sticky pattern of specialization. Catching-up has focused on capacity and international market share expansion for homogeneous, mass-produced products; very little upgrading has occurred into higher-end and rapidly growing market segments for differentiated products and services. Such truncated upgrading is one important reason for Korea´s vulnerability to the financial and currency crisis.

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Bibliographic Info

Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 98-16.

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Date of creation: 1998
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Handle: RePEc:aal:abbswp:98-16

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Web page: http://www.druid.dk/

Related research

Keywords: learning; innovation; catching-up; industrialization; industrial upgrading; industrial p;

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References

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  1. Nicolai J. Foss, 1996. "Firms, Incomplete Contracts and Organizational Learning," DRUID Working Papers 96-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  2. Peter Maskell, 1996. "Localised Low-tech Learning in the Furniture Industry," DRUID Working Papers 96-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  3. Jomo KS, 1998. "Financial liberalization, crises, and Malaysian policy responses," World Development, Elsevier, vol. 26(8), pages 1563-1574, August.
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Citations

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Cited by:
  1. S.M. Naseem, 1998. "Globalisation, Technology, and Asian Economic Growth," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(4), pages 401-429.
  2. Kang-Kook Lee & James Crotty, 2004. "Was the IMF's Imposition of Economic Regime Change Justified? A Critique of the IMF's Economic and Political Role in Korea During and After the Crisis," Working Papers wp77, Political Economy Research Institute, University of Massachusetts at Amherst.
  3. Kirsten Foss & Nicolai J. Foss, 1999. "Organizing Economic Experiments The Role of Firms," DRUID Working Papers 99-5, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  4. Leo van Grunsven, 2006. "New Industries in Southeast Asia’s Late Industrialization: Evolution versus Creation - The Automation Industry in Penang (Malaysia) considered," Papers in Evolutionary Economic Geography (PEEG) 0611, Utrecht University, Section of Economic Geography, revised Dec 2006.
  5. Keld Laursen, 1998. "Do Export and Technological Specialisation Patterns Co-evolve in Terms of Convergence or Divergence? Evidence From 19 OECD Countries, 1971-1991," DRUID Working Papers 98-18, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  6. S.M. Naeem, 1998. "Globalisation, Technology, and Asian Economic Growth," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(4), pages 635-659.
  7. Yue Wang & Stephen Nicholas, 2007. "The formation and evolution of non-equity strategic alliances in China," Asia Pacific Journal of Management, Springer, vol. 24(2), pages 131-150, June.
  8. Azadegan, Arash & Wagner, Stephan M., 2011. "Industrial upgrading, exploitative innovations and explorative innovations," International Journal of Production Economics, Elsevier, vol. 130(1), pages 54-65, March.
  9. Jang-Sup SHIN & Sung-Won JANG, 2005. "Creating First-Mover Advantages : The Case of Samsung Electronics," Development Economics Working Papers 22575, East Asian Bureau of Economic Research.
  10. Timmer, Marcel P., 2003. "Technological development and rates of return to investment in a catching-up economy: the case of South Korea," Structural Change and Economic Dynamics, Elsevier, vol. 14(4), pages 405-425, December.
  11. Jukka Kaisla, 1998. "The Market Process and the Emergence of the Firm Some Indications of Entrepreneurship Under Genuine uncertainty," DRUID Working Papers 98-17, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  12. Erin Pleggenkuhle-Miles & Ramya Aroul & Sunny Sun & Yu-Shan Su, 2007. "The adolescence of Asia management research: APJM, 1997–2006," Asia Pacific Journal of Management, Springer, vol. 24(4), pages 467-489, December.
  13. Dieter Ernst, 1999. "Responses to the Crisis Constraints to a Rapid Trade Adjustment in East Asia�s Electronics Industry," DRUID Working Papers 99-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.

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