IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v31y2014icp86-94.html
   My bibliography  Save this article

The South Korean auto industry's path to maturity

Author

Listed:
  • Truett, Lila J.
  • Truett, Dale B.

Abstract

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. In its early years, the industry also gained technological knowhow through licensing agreements rather than investing heavily in research and development. The results of this study strongly suggest that the industry as a whole has achieved a minimum 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.

Suggested Citation

  • Truett, Lila J. & Truett, Dale B., 2014. "The South Korean auto industry's path to maturity," International Review of Economics & Finance, Elsevier, vol. 31(C), pages 86-94.
  • Handle: RePEc:eee:reveco:v:31:y:2014:i:c:p:86-94 DOI: 10.1016/j.iref.2014.01.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056014000033
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kerkvliet, Joe & McMullen, B Starr, 1997. "The Impact of Unionization on Motor Carrier Costs," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 271-284, April.
    2. Mountain, Dean C, 1986. "Economies of Scale versus Technological Change: An Aggregate Production Function for Switzerland," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 707-711, November.
    3. Lila Truett & Dale Truett, 2006. "Production and costs in the South African motor vehicle industry," Applied Economics, Taylor & Francis Journals, vol. 38(20), pages 2381-2392.
    4. 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.
    5. 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 118-121, May.
    6. Tybout, James & de Melo, Jamie & Corbo, Vittorio, 1991. "The effects of trade reforms on scale and technical efficiency : New evidence from Chile," Journal of International Economics, Elsevier, vol. 31(3-4), pages 231-250, November.
    7. Nicolas Péridy, 2003. "Exchange rate volatility, sectoral trade, and the aggregation bias," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(3), pages 389-418, September.
    8. 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.
    9. Fuss,Melvyn A. & Waverman,Leonard, 1992. "Costs and Productivity in Automobile Production," Cambridge Books, Cambridge University Press, number 9780521341417, March.
    10. Guilkey, David K & Lovell, C A Knox & Sickles, Robin C, 1983. "A Comparison of the Performance of Three Flexible Functional Forms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 591-616, October.
    11. Lila J. Truett & Dale B. Truett, 2008. "Insourcing, Outsourcing, and Unemployment in the Spanish Auto Industry," Review of Development Economics, Wiley Blackwell, vol. 12(4), pages 702-713, November.
    12. Burnside, Craig, 1996. "Production function regressions, returns to scale, and externalities," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 177-201, April.
    13. 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.
    14. 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 339-344, May.
    15. Jordi Catalan, 2010. "Strategic policy revisited: The origins of mass production in the motor industry of Argentina, Korea and Spain, 1945-87," Business History, Taylor & Francis Journals, vol. 52(2), pages 207-230.
    16. 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.
    17. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Truett, Lila J. & Truett, Dale B., 2017. "The German motor vehicle industry: Costs and crisis," International Review of Economics & Finance, Elsevier, vol. 48(C), pages 49-55.

    More about this item

    Keywords

    South Korea; Motor vehicle industry; Scale economies; Cost function;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:31:y:2014:i:c:p:86-94. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.