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Catching-Up, Crisis and Industrial Upgrading. Evolutionary Aspects of Technological Learning in Korea's Electronics Industry

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  • Dieter Ernst

Abstract

This paper addresses a puzzle: How is it possible that a country that has established a broad, export-oriented industrial base at record speed, remains vulnerable to the vicissitudes of international finance and currency markets? I argue that the Korean model that was tremendously successful for catching-up, has now reached its limits. The analysis centers on the co-evolution of industry structure and firm behavior. The focus is on the role of technological learning for the development of the electronics industry, a main carrier of Korea´s successful late industrialization. It is shown that a heavy reliance on credit and an extremely unbalanced industry structure have given rise to a narrow knowledge base and a sticky pattern of specialization. Catching-up has focused on capacity and international market share expansion for homogeneous, mass-produced products; very little upgrading has occurred into higher-end and rapidly growing market segments for differentiated products and services. Such truncated upgrading is one important reason for Korea´s vulnerability to the financial and currency crisis.

Suggested Citation

  • Dieter Ernst, 1998. "Catching-Up, Crisis and Industrial Upgrading. Evolutionary Aspects of Technological Learning in Korea's Electronics Industry," DRUID Working Papers 98-16, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  • Handle: RePEc:aal:abbswp:98-16
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    References listed on IDEAS

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    1. Nicolai J. Foss, 1996. "Firms, Incomplete Contracts and Organizational Learning," DRUID Working Papers 96-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    2. Jomo KS, 1998. "Financial liberalization, crises, and Malaysian policy responses," World Development, Elsevier, vol. 26(8), pages 1563-1574, August.
    3. Peter Maskell, 1996. "Localised Low-tech Learning in the Furniture Industry," DRUID Working Papers 96-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
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    Citations

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    Cited by:

    1. Timmer, Marcel P., 2003. "Technological development and rates of return to investment in a catching-up economy: the case of South Korea," Structural Change and Economic Dynamics, Elsevier, vol. 14(4), pages 405-425, December.
    2. Kang-Kook Lee & James Crotty, 2004. "Was the IMF's Imposition of Economic Regime Change Justified? A Critique of the IMF's Economic and Political Role in Korea During and After the Crisis," Working Papers wp77, Political Economy Research Institute, University of Massachusetts at Amherst.
    3. S.M. Naeem, 1998. "Globalisation, Technology, and Asian Economic Growth," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(4), pages 635-659.
    4. Dieter Ernst, 1999. "Responses to the Crisis Constraints to a Rapid Trade Adjustment in East Asia´s Electronics Industry," DRUID Working Papers 99-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    5. Azadegan, Arash & Wagner, Stephan M., 2011. "Industrial upgrading, exploitative innovations and explorative innovations," International Journal of Production Economics, Elsevier, vol. 130(1), pages 54-65, March.
    6. S.M. Naseem, 1998. "Globalisation, Technology, and Asian Economic Growth," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 37(4), pages 401-429.
    7. Jukka Kaisla, 1998. "The Market Process and the Emergence of the Firm Some Indications of Entrepreneurship Under Genuine uncertainty," DRUID Working Papers 98-17, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    8. Yuan, Lin & Pangarkar, Nitin & Wu, Jie, 2016. "The interactive effect of time and host country location on Chinese MNCs’ performance: An empirical investigation," Journal of World Business, Elsevier, vol. 51(2), pages 331-342.
    9. Keld Laursen, 1998. "Do Export and Technological Specialisation Patterns Co-evolve in Terms of Convergence or Divergence? Evidence From 19 OECD Countries, 1971-1991," DRUID Working Papers 98-18, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    10. Jang-Sup SHIN & Sung-Won JANG, 2005. "Creating First-Mover Advantages : The Case of Samsung Electronics," Development Economics Working Papers 22575, East Asian Bureau of Economic Research.
    11. Erin Pleggenkuhle-Miles & Ramya Aroul & Sunny Sun & Yu-Shan Su, 2007. "The adolescence of Asia management research: APJM, 1997–2006," Asia Pacific Journal of Management, Springer, vol. 24(4), pages 467-489, December.
    12. Kirsten Foss & Nicolai J. Foss, 1999. "Organizing Economic Experiments The Role of Firms," DRUID Working Papers 99-5, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    13. Slavo Radosevic & Esin Yoruk, 2016. "A New Metrics Of Technology Upgrading: The Central And East European Countries In A Comparative Perspective," UCL SSEES Economics and Business working paper series 2016-2, UCL School of Slavonic and East European Studies (SSEES).
    14. Leo van Grunsven, 2006. "New Industries in Southeast Asia’s Late Industrialization: Evolution versus Creation - The Automation Industry in Penang (Malaysia) considered," Papers in Evolutionary Economic Geography (PEEG) 0611, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2006.
    15. Yue Wang & Stephen Nicholas, 2007. "The formation and evolution of non-equity strategic alliances in China," Asia Pacific Journal of Management, Springer, vol. 24(2), pages 131-150, June.

    More about this item

    Keywords

    learning; innovation; catching-up; industrialization; industrial upgrading; industrial p;

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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