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The South Korean Auto Industry: All Grown Up Now? Since 1962, South Korea has recognized the motor vehicle industry as a critical industry for economic development. The government has been closely involved in the industry's growth from infancy to its current position among the top five motor vehicle producers in the world. The results of this study strongly suggest that the industry as a whole has achieved a minimally efficient scale of operations. However, cross price elasticity estimates indicate that many rigidities exist in the input markets, particularly with respect to outsourced intermediate products. The restrictions on imports of these products may have to be reduced as South Korea seeks to expand its global trade footprint by participating in bilateral preferential trade agreements, presenting challenges for the industry

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  • Lila J. Truett

    (The University of Texas at San Antonio)

  • Dale B. Truett

    (The University of Texas at San Antonio)

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    File URL: http://business.utsa.edu/wps/eco/008ECO-102-2011.pdf
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    Paper provided by College of Business, University of Texas at San Antonio in its series Working Papers with number 0011.

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    Length: 24 pages
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    Handle: RePEc:tsa:wpaper:008eco-102-2011

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    Keywords: South Korea; Motor Vehicle Industry;

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    1. Eakin, B Kelly & McMillen, Daniel P & Buono, Mark J, 1990. "Constructing Confidence Intervals Using the Bootstrap: An Application to a Multi-Product Cost Function," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 339-44, May.
    2. Tybout, James R. & Westbrook, M. Daniel, 1995. "Trade liberalization and the dimensions of efficiency change in Mexican manufacturing industries," Journal of International Economics, Elsevier, vol. 39(1-2), pages 53-78, August.
    3. Kerkvliet, Joe & McMullen, B Starr, 1997. "The Impact of Unionization on Motor Carrier Costs," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 271-84, April.
    4. Bernadette Andreosso-O'Callaghan, 2009. "Economic structural complementarity: how viable is the Korea-EU FTA?," Journal of Economic Studies, Emerald Group Publishing, vol. 36(2), pages 147-167, May.
    5. Lee, DukHee & Jung, MiSuk, 2009. "Economic effects of trade patterns on productivity: Evidence from the Korean automobile industry," Japan and the World Economy, Elsevier, vol. 21(1), pages 71-84, January.
    6. 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.
    7. Westbrook, M Daniel & Tybout, James R, 1993. "Estimating Returns to Scale with Large, Imperfect Panels: An Application to Chilean Manufacturing Industries," World Bank Economic Review, World Bank Group, vol. 7(1), pages 85-112, January.
    8. Park, Yung Chul, 1990. "Development Lessons from Asia: The Role of Government in South Korea and Taiwan," American Economic Review, American Economic Association, vol. 80(2), pages 118-21, May.
    9. Tybout, James & de Melo, Jaime & Corbo, Vittorio, 1990. "The effects of trade reforms on scale and technical efficiency : new evidence from Chile," Policy Research Working Paper Series 481, The World Bank.
    10. Helleiner, Gerald K. (ed.), 1992. "Trade Policy, Industrialization, and Development: New Perspectives," OUP Catalogue, Oxford University Press, number 9780198283591.
    11. Truett, Lila J. & Truett, Dale B., 2007. "A cost-based analysis of scale economies in the French auto industry," International Review of Economics & Finance, Elsevier, vol. 16(3), pages 369-382.
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