IDEAS home Printed from https://ideas.repec.org/a/kap/ecopln/v49y2016i1p41-69.html
   My bibliography  Save this article

Why is the South Korean growth experience different? An analysis of the differences of per capita GDP between South Korea and South Asian countries

Author

Listed:
  • Abeer Khandker

    ()

Abstract

The economic growth of South Korea, particularly from 1962 till now, has been at the least outstanding. There have been many explanations of the causes of this remarkable achievement of South Korea, with most of the explanations attributing the rapid industrialization and growth of South Korea to the adoption of an outward-looking strategy by the country in the early 1960s. The South Asian countries have been trying to adopt trade oriented strategies for many years now. But none of the South Asian countries has been able to reach the ‘developed country’ status as yet. Hence, this paper is an endeavor to find out what explains the differences in growth between South Korea and the developing countries of South Asia, and what we can learn from all this. The results suggest that the main factors that have evidently caused the differences in per capita GDP between South Korea and Bangladesh, India, Pakistan, Nepal and Sri Lanka, on average, are labor, per capita human capital and physical capital. Trade openness is also another significant determinant, but their exact effects are not overwhelmingly positive, if the marginal effects estimated in this paper are taken into account. Financial liberalization is seen to be impacting differences in per capita physical capital more than differences in per capita GDP, but it is not statistically significant in all specifications. Hence, the most important lesson to be learnt from the South Korean growth experience is that, no matter how much a country increases trade or liberalizes its economy, if the country does not manage to improve its human capital and production technology through these policies, it will not prosper in the long run. Copyright Springer Science+Business Media New York 2016

Suggested Citation

  • Abeer Khandker, 2016. "Why is the South Korean growth experience different? An analysis of the differences of per capita GDP between South Korea and South Asian countries," Economic Change and Restructuring, Springer, vol. 49(1), pages 41-69, February.
  • Handle: RePEc:kap:ecopln:v:49:y:2016:i:1:p:41-69
    DOI: 10.1007/s10644-015-9173-7
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10644-015-9173-7
    Download Restriction: Access to full text is restricted to subscribers.

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

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ky-Hyang Yuhn & Jene Kwon, 2000. "Economic growth and productivity: A case study of South Korea," Applied Economics, Taylor & Francis Journals, vol. 32(1), pages 13-23.
    2. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    4. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    5. Kang, Jung Mo, 2006. "An estimation of growth model for South Korea using human capital," Journal of Asian Economics, Elsevier, vol. 17(5), pages 852-866, November.
    6. Cheng Hsiao & H. Steve Ching & Shui Ki Wan, 2012. "A Panel Data Approach For Program Evaluation: Measuring The Benefits Of Political And Economic Integration Of Hong Kong With Mainland China," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 27(5), pages 705-740, August.
    7. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    8. Byung Woo Kim, 2008. "Future of Economic Growth for South Korea ," Asian Economic Journal, East Asian Economic Association, vol. 22(4), pages 397-410, December.
    9. Feasel, Edward & Kim, Yongbeom & Smith, Stephen C, 2001. "Investment, Exports, and Output in South Korea: A VAR Approach to Growth Empirics," Review of Development Economics, Wiley Blackwell, vol. 5(3), pages 421-432, October.
    10. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    11. Mohsen Bahmani-Oskooee & Ruixin Zhang, 2014. "Is there J-Curve effect in the commodity trade between Korea and rest of the world?," Economic Change and Restructuring, Springer, vol. 47(3), pages 227-250, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Per capita GDP growth; South Korea; South Asia;

    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:kap:ecopln:v:49:y:2016:i:1:p:41-69. 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: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    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.