Industry cost and demand conditions can vary across countries leading to differences in industry market structure, including the distribution of output and productivity across firms and the magnitude of entry and exit flows. It has been argued that despite many outward similarities, two of the most successful Southeast Asian economies, Taiwan and South Korea, differ systematically in the nature of entry costs, the competitiveness of output markets, and the working of their capital markets. In this paper we use micro panel data for producers in seven two-digit manufacturing industries in South Korea and Taiwan and identify a number of systematic differences in industry structure between the two countries. Our empirical findings indicate that, relative to their counterparts in Korea, Taiwanese industries are characterized by less concentrated market structure, more producer turnover, smaller within-industry productivity dispersion across producers, a smaller percentage of plants operating at low productivity levels, and smaller productivity differentials between surviving and failing producers. These patterns are consistent with strong competitive pressures in Taiwan that lead to market selection based on productivity differences. In contrast, the patterns in Korea are consistent with the presence of some impediments to exit or entry that insulate inefficient producers from market pressures.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
8766.
Length: Date of creation: Feb 2002 Date of revision: Handle: RePEc:nbr:nberwo:8766
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References listed on IDEAS 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.:
Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998.
"Job Creation and Destruction,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262540932, December.
Cited by: (explanations, 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.)
Massimo Del Gatto & Adriana Di Liberto & C. Petraglia, 2008.
"Measuring Productivity,"
Working Paper CRENoS
200818, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
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