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

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Dani Rodrik

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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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2722.

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Date of creation: Sep 1988
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Handle: RePEc:nbr:nberwo:2722

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  1. 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. [Downloadable!] (restricted)
  2. Kugler, Maurice & Verhoogen, Eric A., 2009. "The Quality-Complementarity Hypothesis: Theory and Evidence from Colombia," CEPR Discussion Papers 7119, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Robert C. Feenstra & Tzu-Han Yang & Gary G. Hamilton, 1993. "Market Structure and International Trade: Business Groups in East Asia," NBER Working Papers 4536, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. 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. [Downloadable!] (restricted)
  5. 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. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
    Other versions:
  7. 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. [Downloadable!]
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