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Identifying the sources of growth in Taiwan's manufacturing industry

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  • Yih‐Chyi Chuang

Abstract

Using aggregate and two‐digit manufacturing industry data from Taiwan this article reconfirms the existence of strong external economies among industries, and shows that these external economies can be largely attributed to the economy‐wide trade‐induced learning generated from opening trade with developed countries. The trade‐induced learning accounts for about half to three‐quarters of the measured external effects in Taiwan's two‐digit industries. We also find that imports and exports of machinery from and to developed countries (mainly the USA and Japan) bear the greatest trade‐induced learning for Taiwan's manufacturing industries. As trade has both factor accumulation and productive efficiency effects and both effects are likely mutually reinforced, we find that over 40 per cent of output growth of Taiwan's manufacturing during 1975–90 is due to trade‐induced learning which is not explained by the total factor inputs, denoting changes in technology or total factor productivity.

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  • Yih‐Chyi Chuang, 1996. "Identifying the sources of growth in Taiwan's manufacturing industry," Journal of Development Studies, Taylor & Francis Journals, vol. 32(3), pages 445-463.
    • Handle: RePEc:taf:jdevst:v:32:y:1996:i:3:p:445-463
    DOI: 10.1080/00220389608422423
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    References listed on IDEAS

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    1. Chuang, Yih-Chyi, 1998. "Learning by Doing, the Technology Gap, and Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 697-721, August.
    2. Ricardo J. Caballero & Richard K. Lyons, 1989. "The Role of External Economies in U.S. Manufacturing," NBER Working Papers 3033, National Bureau of Economic Research, Inc.
    3. Alwyn Young, 1994. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," NBER Working Papers 4680, National Bureau of Economic Research, Inc.
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    1. Patricia Jones & Abigail Barr, 1996. "Learning by doing in sub-Saharan Africa: Evidence from Ghana," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(3), pages 445-466.
    2. Jajri, Idris & Ismail, Rahmah, 2006. "Technical efficiency, technological change and total factor productivity growth in Malaysian manufacturing sector," MPRA Paper 1956, University Library of Munich, Germany.
    3. Eva Paus & Nola Reinhardt & Michael Robinson, 2003. "Trade Liberalization and Productivity Growth in Latin American Manufacturing, 1970-98," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(1), pages 1-15.
    4. Chia-Hung Sun, 2006. "Imperfect Competition, Economic Miracle, and Manufacturing Productivity Growth: Empirical Evidence from Taiwan," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 34(3), pages 341-359, September.
    5. Aristomène Varoudakis & Thierry Latreille, 1997. "Les facteurs structurels de la compétitivité manufacturière. Une analyse en données de panel pour le Sénégal," Revue Économique, Programme National Persée, vol. 48(3), pages 471-480.
    6. 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.

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