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Industrialization Policies of Korea and Taiwan and Their Effects on Manufacturing Productivity

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  • Okuda, Satoru

Abstract

In this paper the total factor productivity (TFP) of the manufacturing sectors in Taiwan and the Republic of Korean was measured and compared using the growth accounting method. Through descriptive analysis, inefficiency in the Korean manufacturing sectors was revealed, especially for the period prior to 1986. Also for the period posterior to 1986, it was found that TFP tended to contribute more to the value-added growth in both countries. An econometric analysis with industrialization-related variables revealed a contrast in the structure of TFP growth between the two countries. Import penetration, capital intensity, and growth of real output were estimated to exert a positive productivity impact in Taiwan, reflecting Taiwan's flexibility and superiority in factor utilization compared with Korea. It was estimated that the export ratio did not have any major productivity impact in both countries, in contrast with the results reported by the World Bank (The East Asian Miracle: Economic Growth and Public Policy, New York: Oxford University Press, 1993).

Suggested Citation

  • Okuda, Satoru, 1997. "Industrialization Policies of Korea and Taiwan and Their Effects on Manufacturing Productivity," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 35(4), pages 358-381, December.
  • Handle: RePEc:jet:deveco:v:35:y:1997:i:4:p:358-381
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    References listed on IDEAS

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    1. Kwon, Jene K., 1986. "Capital utilization, economies of scale and technical change in the growth of total factor productivity : An Explanation of South Korean manufacturing Growth," Journal of Development Economics, Elsevier, vol. 24(1), pages 75-89, November.
    2. Abe, Makoto & Kawakami, Momoko, 1997. "A Distributive Comparison of Enterprise Size in Korea and Taiwan," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 35(4), pages 382-400, December.
    3. Okuda, Satoru, 1994. "Taiwan's trade and FDI policies and their effect on productivity growth," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 32(4), pages 423-443, December.
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    Citations

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    Cited by:

    1. Sun, Chia-Hung, 2004. "Decomposing productivity growth in Taiwan's manufacturing, 1981-1999," Journal of Asian Economics, Elsevier, vol. 15(4), pages 759-776, August.
    2. 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.
    3. 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.

    More about this item

    Keywords

    Industrialization; Industrial policy; Productivity; Manufacturing industries; South Korea; Taiwan; 工業化; 産業政策; 生産性; 製造業; 韓国; 台湾;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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