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Technological Progress versus Efficiency Gain in Manufacturing Sectors


  • Lee, Jeong-Dong
  • Kim, Tai-Yoo
  • Heo, Eunnyeong


This study decomposes the nonparametric Malmquist productivity index for 36 Korean manufacturing sectors into two components: technological change and technical efficiency change. The empirical results show that while each sector displays quite different growth patterns, productivity growth is dominated by technological change. Technological change is found to have a negative correlation with efficiency change. Secondary regression performed in this study identifies the relationship between productivity growth measures and several key policy variables, such as effective protection rate, market concentration, and so forth. The productivity estimates are compared with those of the conventional Tornqvist productivity index. Copyright 1998 by Blackwell Publishing Ltd

Suggested Citation

  • Lee, Jeong-Dong & Kim, Tai-Yoo & Heo, Eunnyeong, 1998. "Technological Progress versus Efficiency Gain in Manufacturing Sectors," Review of Development Economics, Wiley Blackwell, vol. 2(3), pages 268-281, October.
  • Handle: RePEc:bla:rdevec:v:2:y:1998:i:3:p:268-81

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    References listed on IDEAS

    1. Kornai, Janos & Weibull, Jorgen W, 1978. " The Normal State of the Market in a Shortage Economy: A Queue Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 80(4), pages 375-398.
    2. de Macedo, Jorge Braga, 1987. "Currency inconvertibility, trade taxes and smuggling," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 109-125, October.
    3. Calvo, Guillermo A & Rodriguez, Carlos Alfredo, 1977. "A Model of Exchange Rate Determination under Currency Substitution and Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 617-625, June.
    4. van Wijnbergen, Sweder, 1992. "Intertemporal Speculation, Shortages and the Political Economy of Price Reform," Economic Journal, Royal Economic Society, vol. 102(415), pages 1395-1406, November.
    5. Kamin, Steven B., 1993. "Devaluation, exchange controls, and black markets for foreign exchange in developing countries," Journal of Development Economics, Elsevier, vol. 40(1), pages 151-169, February.
    6. Polterovich, Victor, 1993. "Rationing, Queues, and Black Markets," Econometrica, Econometric Society, vol. 61(1), pages 1-28, January.
    7. Sah, Raaj Kumar, 1987. "Queues, Rations, and Market: Comparisons of Outcomes for the Poor and the Rich," American Economic Review, American Economic Association, vol. 77(1), pages 69-77, March.
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    Cited by:

    1. 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.
    2. Francisco Garcia-Blanch, 2001. "An Empirical Inquiry into the Nature of South Korean Economic Growth," CID Working Papers 74A, Center for International Development at Harvard University.

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