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Schumpeter and arrow: Who wins in Korea and Taiwan? A case method analysis of cross country industrial structure


  • You-liang Deng


A case study approach is applied to a cross-country comparison of Korea and Taiwan to model their developmental patterns and to examine the implications of their approach to industrialization, with specific regard to the theories of vertical integration by Schumpeter and Arrow and the theories of asset specificity by Williamson. The implications of inflation risks, external debt financing, innovation incentives, and restructuring problems from the aftermath of the 1997 Asian financial crisis will also be examined. The methodology used is a case study of two industries: bicycles and semiconductors. The results of this study are being used to create two dynamic models of industrial development for the two countries and to provide reasons for the differences in development paths and the implications associated with the undertaking of two drastically different models of industrialization.

Suggested Citation

  • You-liang Deng, 2004. "Schumpeter and arrow: Who wins in Korea and Taiwan? A case method analysis of cross country industrial structure," Global Economic Review, Taylor & Francis Journals, vol. 33(4), pages 97-122.
  • Handle: RePEc:taf:glecrv:v:33:y:2004:i:4:p:97-122
    DOI: 10.1080/12265080408449864

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