Estimates of Multifactor Productivity, ICT Contributions and Resource Reallocation Effects in Japan and Korea
AbstractAs the studies of Krugman (1994), Young (1994), and Lau and Kim (1994) showed, the East Asian economic miracle may be characterized as 'input-led' growth. However, both the stagnation in investment and the decrease in average working hours combined with a decrease in the fertility rate require a productivity surge for renewed, sustainable growth in East Asia. The purpose of our study is to identify the sources of economic growth based on a KLEMS model for Japan and the Republic of Korea, which experienced a 'Lost Decade' and a financial crisis in 1997-1998, respectively. We report estimates of multifactor productivity in the market economy of Japan and Korea based on the dataset of a 72-industry classification following EU KLEMS project guidelines. We also identify the contributions of ICT assets and resource reallocations in two economies. Both economies have strong ICT-producing sectors but relatively weaker ICT-usage effects. Lower productivity in service industries due to excessive regulations and lack of competition in public service sectors seem to have worked against enhancing ICT-usage effects and finding renewed sustainable growth paths. The resource reallocation effects of capital input in both Japan and Korea were either negligible or insignificant, while those of labor input (the labor shift from lower wage industries to higher wage industries) were positive and significant. Therefore, a series of productivity-enhancing policies designed to promote reallocation of capital input seems crucial for both economies to resume sustainable growth paths.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 09021.
Length: 31 pages
Date of creation: May 2009
Date of revision:
Contact details of provider:
Postal: 11th floor, Annex, Ministry of Economy, Trade and Industry (METI) 1-3-1, Kasumigaseki Chiyoda-ku, Tokyo, 100-8901
Web page: http://www.rieti.go.jp/
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-30 (All new papers)
- NEP-CSE-2009-05-30 (Economics of Strategic Management)
- NEP-EFF-2009-05-30 (Efficiency & Productivity)
- NEP-ICT-2009-05-30 (Information & Communication Technologies)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fukao, Kyoji & Miyagawa, Tsutomu & Takizawa, Miho, 2007.
"Productivity Growth and Resource Reallocation in Japan,"
CEI Working Paper Series
2007-9, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
- Kyoji Fukao & Tsutomu Miyagawa & Miho Takizawa, 2007. "Productivity Growth and Resource Reallocation in Japan," Hi-Stat Discussion Paper Series d07-224, Institute of Economic Research, Hitotsubashi University.
- Berndt, Ernst R. & Christensen, Laurits R., 1973. "The translog function and the substitution of equipment, structures, and labor in U.S. manufacturing 1929-68," Journal of Econometrics, Elsevier, vol. 1(1), pages 81-113, March.
- Fukao, Kyoji & Kim, YoungGak & Kwon, Hyeog Ug, 2007.
"Plant Turnover and TFP Dynamics in Japanese Manufacturing,"
CEI Working Paper Series
2006-17, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
- Kyoji Fukao & Young Gak Kim & Hyeog Ug Kwon, 2006. "Plant Turnover and TFP Dynamics in Japanese Manufacturing," Hi-Stat Discussion Paper Series d06-180, Institute of Economic Research, Hitotsubashi University.
- Denny, Michael & Fuss, Melvyn A, 1977. "The Use of Approximation Analysis to Test for Separability and the Existence of Consistent Aggregates," American Economic Review, American Economic Association, vol. 67(3), pages 404-18, June.
- Berndt, Ernst R & Christensen, Laurits R, 1974. "Testing for the Existence of a Consistent Aggregate Index of Labor Inputs," American Economic Review, American Economic Association, vol. 64(3), pages 391-404, June.
- Pyo, Hak K. & Ha, Bongchan, 2007. "A Test of Separability and Random Effects in Production Function with Decomposed IT Capital," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 48(1), pages 67-81, June.
- Young, Alwyn, 1994. "Lessons from the East Asian NICS: A contrarian view," European Economic Review, Elsevier, vol. 38(3-4), pages 964-973, April.
- Mostafa SALIMIFAR & Mehdi BEHNAME, 2013. "Information Technology And Productivity Growth In Islamic Countries," Romanian Journal of Economics, Institute of National Economy, vol. 36(1(45)), pages 128-135, June.
- Tsutomu Miyagawa & Shoichi Hisa, 2013. "Measurement of Intangible Investment by Industry and Economic Growth in Japan," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 9(2), pages 405-432, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (NUKATANI Sorahiko).
If references are entirely missing, you can add them using this form.