IDEAS home Printed from https://ideas.repec.org/p/gro/rugggd/199840.html
   My bibliography  Save this paper

Catch up patterns in newly industrializing countries : an international comparison of manufacturing productivity in Taiwan, 1961-1993

Author

Listed:
  • Timmer, Marcel P.

    (Groningen University)

Abstract

Taiwan has undergone a process of swift industrialization after 1948. Rapid accumulation of physical and human capital enabled Taiwan to exploit new technologies and products, resulting in rapid catch up in labour productivity relative to more advanced economies. Using the industry-of-origin approach, this paper shows that in 1961, Taiwan's labour productivity in aggregate manufacturing was 11% of the level in the United States, increasing to 26% in 1986. This catch up process was found for all 13 manufacturing branches. After 1986, a process of deindustrialization set in and inflow of labour in the manufacturing sector stagnated. Relative labour productivity in aggregate manufacturing still continued to increased to 31% in 1993, but catch up was not shared by all branches. The increase in labour productivity was driven by a large rise in capital intensity from 7% of the US level in 1961 to 47% in 1993. In 1993, capital intensity in Taiwanese manufacturing was about equal to the capital intensity in US manufacturing in 1961. This shows that there are still plenty of opportunities for further capital intensification. TFP growth in Taiwanese manufacturing averaged 2.2% per year for the period 1961-1993, of which only 0.2% was due to a reallocation of resources between manufacturing branches. In contrast to the catch up process in terms of labour productivity and capital intensity, aggregate TFP did not increase relative to the US and stagnated at around 40%. Some branches like wearing apparel and electrical machinery showed strong catch up, but this was offset by the performance in branches like chemicals and paper which were falling behind the performance levels of more advanced economies. Economies of scale do not provide an explanation of the gap in TFP levels between the US and Taiwan. An adjustment for the relatively small size of Taiwanese manufacturing firms adds only 3% to the Taiwanese TFP level. Differences in human capital are more important. Using a growth accounting framework, they explained about 7% of the TFP gap relative to the United States.

Suggested Citation

  • Timmer, Marcel P., 1998. "Catch up patterns in newly industrializing countries : an international comparison of manufacturing productivity in Taiwan, 1961-1993," GGDC Research Memorandum 199840, Groningen Growth and Development Centre, University of Groningen.
    • Handle: RePEc:gro:rugggd:199840
    as

    Download full text from publisher

    File URL: http://irs.ub.rug.nl/ppn/242436927
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pilat, Dirk, 1995. "Comparative productivity of Korean manufacturing, 1967-1987," Journal of Development Economics, Elsevier, vol. 46(1), pages 123-144, February.
    2. Chenery, Hollis B., 1984. "Economic Structure and Performance," Elsevier Monographs, Elsevier, edition 1, number 9780126800609 edited by Syrquin, Moshe & Taylor, Lance & Westphal, Larry E..
    3. repec:dgr:rugggd:199737 is not listed on IDEAS
    4. repec:dgr:rugggd:199411 is not listed on IDEAS
    5. Gersbach, Hans & Ark, Bart van, 1994. "Micro Foundations for International Productivity Comparisons," GGDC Research Memorandum 199411, Groningen Growth and Development Centre, University of Groningen.
    6. Ranis, Gustav, 1995. "Another Look at the East Asian Miracle," The World Bank Economic Review, World Bank, vol. 9(3), pages 509-534, September.
    7. Nelson, Richard R, 1973. "Recent Exercises in Growth Accounting: New Understanding or Dead End?," American Economic Review, American Economic Association, vol. 63(3), pages 462-468, June.
    8. Timmer, M.P. & Szirmai, A., 1997. "Growth and Divergence in Manufacturing Performance in South and East Asia," Papers 37, Groningen State, Institute of Economic Research-.
    9. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 641-680.
    10. Richard E. Caves, 1992. "Industrial Efficiency in Six Nations," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031930, December.
    11. Edward K.Y. Chen, 1997. "The Total Factor Productivity Debate: Determinants of Economic Growth in East Asia," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 11(1), pages 18-38, May.
    12. Abramovitz,Moses, 1989. "Thinking about Growth," Cambridge Books, Cambridge University Press, number 9780521333962.
    13. repec:fth:harver:1510 is not listed on IDEAS
    14. Susan M. Collins & Barry P. Bosworth, 1996. "Economic Growth in East Asia: Accumulation versus Assimilation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(2), pages 135-204.
    15. David Dollar & Edward N. Wolff, 1993. "Competitiveness, Convergence, and International Specialization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262041359, December.
    16. Pack, Howard & Westphal, Larry E., 1986. "Industrial strategy and technological change : Theory versus reality," Journal of Development Economics, Elsevier, vol. 22(1), pages 87-128, June.
    17. Okuda, Satoru, 1994. "Taiwan's trade and FDI policies and their effect on productivity growth," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 32(4), pages 423-443, December.
    18. Dirk Pilat, 1994. "The Economics Of Rapid Growth," Books, Edward Elgar Publishing, number 360.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Murat Ungor, 2017. "Productivity Growth and Labor Reallocation: Latin America versus East Asia," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 25-42, March.
    2. Szirmai, Adam & Yamfwa, Francis & Lwamba, Chibwe, 2002. "Zambian manufacturing performance in comparative perspective," GGDC Research Memorandum 200253, Groningen Growth and Development Centre, University of Groningen.
    3. Marcel Timmer & Adam Szirmai, 1999. "Comparative productivity performance in manufacturing in South and East Asia, 1960-93," Oxford Development Studies, Taylor & Francis Journals, vol. 27(1), pages 57-79.
    4. repec:dgr:rugggd:200253 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:dgr:rugggd:199840 is not listed on IDEAS
    2. Timmer, Marcel P., 1999. "Climbing the Technology Ladder Too Fast? An International Comparison of Productivity in South and East- Asian Manufacturing, 1963-1993," Working Papers 99.2, Eindhoven Center for Innovation Studies.
    3. repec:dgr:rugccs:199919 is not listed on IDEAS
    4. Timmer, Marcel P., 2002. "Climbing the Technology Ladder Too Fast? New Evidence on Comparative Productivity Performance in Asian Manufacturing," Journal of the Japanese and International Economies, Elsevier, vol. 16(1), pages 50-72, March.
    5. Hofman, André A., 2000. "The economic development of Latin America in the twentieth century," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1650 edited by Eclac.
    6. Chia-Hung Sun, 2005. "Productivity growth in East Asian manufacturing: a fading miracle or measurement problem?," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(1), pages 1-19.
    7. Booth, Anne, 1999. "Initial Conditions and Miraculous Growth: Why is South East Asia Different From Taiwan and South Korea?," World Development, Elsevier, vol. 27(2), pages 301-321, February.
    8. Sangho Kim & Young Hoon Lee, 2006. "The productivity debate of East Asia revisited: a stochastic frontier approach," Applied Economics, Taylor & Francis Journals, vol. 38(14), pages 1697-1706.
    9. Ricardo A. López, 2005. "Trade and Growth: Reconciling the Macroeconomic and Microeconomic Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 19(4), pages 623-648, September.
    10. Ha-Joon Chang & Ali Cheema & L. Mises, 2002. "Conditions For Successful Technology Policy In Developing Countries—Learning Rents, State Structures, And Institutions," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(4-5), pages 369-398.
    11. Ermisch, J. F. & Huff, W. G., 1999. "Hypergrowth in an East Asian NIC: Public policy and capital accumulation in Singapore," World Development, Elsevier, vol. 27(1), pages 21-38, January.
    12. Mitsuhiko Kataoka, 2013. "Capital Stock Estimates by Province and Interprovincial Distribution in Indonesia," Asian Economic Journal, East Asian Economic Association, vol. 27(4), pages 409-428, December.
    13. Boon L. Lee & William Shepherd, 2009. "Output and Productivity Performance of Hong Kong and Singapore's Transport and Communications Sector, 1990 to 2005," Asian Economic Journal, East Asian Economic Association, vol. 23(1), pages 65-91, March.
    14. Khan, Haider, 2008. "Building an Innovative Economy through Managed Creative Destruction: A Theory with Applications to South Korea," MPRA Paper 7713, University Library of Munich, Germany, revised 2008.
    15. Ky‐hyang Yuhn & Seung R. Park, 2010. "Information Technology, Organizational Transformation and Productivity Growth: An Examination of the Brynjolfsson–Hitt Proposition," Asian Economic Journal, East Asian Economic Association, vol. 24(1), pages 87-108, March.
    16. Lee, Jong-Wha, 2005. "Human capital and productivity for Korea's sustained economic growth," Journal of Asian Economics, Elsevier, vol. 16(4), pages 663-687, August.
    17. Jakob B. Madsen* & Md. Rabiul Islam, 2012. "The Anatomy of the Asian Take-off," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 4(2), pages 1-24, July.
    18. Prados de la Escosura, Leandro & Rosés, Joan R., 2008. "Proximate causes of economic growth in Spain, 1850-2000," IFCS - Working Papers in Economic History.WH wp08-12, Universidad Carlos III de Madrid. Instituto Figuerola.
    19. Ludger Wößmann, 2005. "Educational Production in East Asia: The Impact of Family Background and Schooling Policies on Student Performance," German Economic Review, Verein für Socialpolitik, vol. 6(3), pages 331-353, August.
    20. Huikang Ying, 2014. "Growth and Structural Change in a Dynamic Lagakos-Waugh Model," Bristol Economics Discussion Papers 14/639, School of Economics, University of Bristol, UK.
    21. Sarath Delpachitra & Pham Van Dai, 2012. "The Determinants of TFP Growth in Middle Income Economies in ASEAN: Implication of Financial Crises," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 11(1), pages 63-88, June.
    22. Gundlach, Erich & Wo[beta]mann, Ludger, 2001. "The fading productivity of schooling in East Asia," Journal of Asian Economics, Elsevier, vol. 12(3), pages 401-417.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gro:rugggd:199840. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hanneke Tamling (email available below). General contact details of provider: https://edirc.repec.org/data/ferugnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.