Using plant level panel data on Korean manufacturing during the 1990-98 period, this study tries to assess the role of entry and exit in enhancing aggregate productivity, both qualitatively and quantitatively. The main findings of this study are summarised as follows. First, plant entry and exit rates in Korean manufacturing seem quite high: they are higher than in both the United States and several developing countries for which comparable studies exist. Second, in line with existing studies on other countries, plant turnover reflects underlying productivity differentials in Korean manufacturing, with the “shadow of death” effect as well as selection and learning effects all present. Third, plant entry and exit account for as much as 45 and 65 per cent in manufacturing productivity growth during cyclical upturn and downturn, respectively. This study also shows that plant birth and death are mainly a process of resource reallocation from plants with relatively low and declining ...

Cette étude essaie de déterminer le rôle des entrées et sorties des firmes dans l’amélioration de la productivité globale, à la fois qualitativement et quantitativement, en utilisant des données de panel dans le secteur manufacturier coréen au niveau des installations industrielles durant la période 1990-98. Les conclusions de l’étude se résument comme suit : premièrement, les taux des entrées et sorties des firmes au niveau des installations dans le secteur manufacturier coréen semblent assez élevés. Ils sont plus élevés qu’aux États-Unis et dans plusieurs pays en voie de développement pour lesquels des études comparables existent. Deuxièmement, en accord avec des études existantes sur d’autres pays, la dynamique industrielle est le produit des différentiels de productivité sous-jacents dans le secteur manufacturier coréen ; l’effet “ombre de la mort” ainsi que les effets de sélection et d’apprentissage sont également présents. Troisièmement, les entrées et sorties représentent jusqu’à 45 et 65 pour cent de la croissance de la productivité manufacturière, respectivement, au ...

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Paper provided by OECD, Economics Department in its series OECD Economics Department Working Papers with number 272.

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Date of creation: 13 Dec 2000
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Handle: RePEc:oec:ecoaaa:272-en

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Keywords: entry and exit; Korean manufacturing; productivity growth; croissance de la productivité; entrées et sorties des firmes; secteur manufacturier coréen;

Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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1. Kiyohiko G. Nishimura & Takanobu Nakajima & Kozo Kiyota, 2003. "Does Natural Selection Mechanism Still Work in Severe Recessions? --]Examination of the Japanese Economy in the 1990s ---," CIRJE F-Series CIRJE-F-222, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
2. Frances Ruane & Ali U?ur, 2005. "Labour Productivity and Foreign Direct Investment in Irish Manufacturing Industry: A Decomposition Analysis," The Institute for International Integration Studies Discussion Paper Series iiisdp027, IIIS. [Downloadable!]
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3. Oh, Inha & Heshmati, Almas & Baek, Chulwoo & Lee, Jeong-Dong, 2006. "Comparative Analysis of Firm Dynamics by Size: Korean Manufacturing," Ratio Working Papers 94, The Ratio Institute.
4. Sanghoon Ahn & Kyoji Fukao & Hyeog Ug Kwon, 2005. "The Internationalization and Performance of Korean and Japanese Firms: An Empirical Analysis Based on Micro-data," Discussion papers 05008, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
5. Kyoji Fukao & Tomohiko Inui & Hiroki Kawai & Tsutomu Miyagawa, 2004. "Sectoral Productivity and Economic Growth in Japan, 1970-98: An Empirical Analysis Based on the JIP Database," Hi-Stat Discussion Paper Series d03-19, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
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   • Kyoji Fukao & Tomohiko Inui & Hiroki Kawai & Tsutomu Miyagawa, 2004. "Sectoral Productivity and Economic Growth in Japan, 1970–98: An Empirical Analysis Based on the JIP Database," NBER Chapters, in: Growth and Productivity in East Asia, NBER-East Asia Seminar on Economics, Volume 13, pages 177-228 National Bureau of Economic Research, Inc. [Downloadable!]
6. Sanghoon Ahn, 2004. "Global Competition, Technology Spillovers and Firm Dynamics:," Econometric Society 2004 Far Eastern Meetings 793, Econometric Society. [Downloadable!]

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