IDEAS home Printed from https://ideas.repec.org/p/cid/wpfacu/74a.html
   My bibliography  Save this paper

An Empirical Inquiry into the Nature of South Korean Economic Growth

Author

Listed:
  • Francisco Garcia-Blanch

Abstract

South Korea has experienced spectacular economic growth rates over the last forty years. How did this economic "miracle" occur? Economic growth in Korea can be explained in terms of geography, demography, human development or economic convergence theories. However, the debate over the role of legal, political and institutional development in Korean economic growth is perhaps the most complex of all. This paper offers an empirical estimation of the explanatory variables of growth, touching upon legal, political, cultural and institutional developments, and measures the impact of physical and human capital and productivity increases on economic growth. Using growth regressions, I find that the early protection of property rights and, to a lesser extent, contract enforcement, was extremely important in achieving ex-post growth in South Korea. On top of that, this East Asian country has benefited from a very successful legal tradition from an economic perspective: the German legal system. The uniform composition in terms of race and language has also favored economic growth in Korea while political stability has been crucial over the development period. This last proposition is also tested in a second empirical exercise where I estimate the role of different factors of production, technical change and productivity growth in South Korea. The role of capital accumulation is very important while productivity growth is important and the growth in human capital is moderate. However, productivity is negative only in periods of high political instability, reinforcing the link between growth, productivity, and political developments.

Suggested Citation

  • 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.
  • Handle: RePEc:cid:wpfacu:74a
    as

    Download full text from publisher

    File URL: https://www.hks.harvard.edu/sites/default/files/centers/cid/files/publications/faculty-working-papers/074.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. David E. BLOOM & Jocelyn E. FINLAY, 2009. "Demographic Change and Economic Growth in Asia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 4(1), pages 45-64, June.
    2. Lee, Jong-Wha, 1996. "Government Interventions and Productivity Growth," Journal of Economic Growth, Springer, vol. 1(3), pages 391-414, September.
    3. Nam Chong-Hyun & Kim Chang-Jin, 2000. "Capital Accumulation And Trade Policy:The Case Of Korea," International Economic Journal, Taylor & Francis Journals, vol. 14(1), pages 111-131.
    4. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    5. Lee, Jeong-Dong & Kim, Tai-Yoo & Heo, Eunnyeong, 1998. "Technological Progress versus Efficiency Gain in Manufacturing Sectors," Review of Development Economics, Wiley Blackwell, vol. 2(3), pages 268-281, October.
    6. Hattori, Tamio & Sato, Yukihito, 1997. "A Comparative Study of Development Mechanisms in Korea and Taiwan: Introductory Analysis," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 35(4), pages 341-357, December.
    7. 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.
    8. Tun-Jen Cheng & Stephan Haggard & David Kang, 1998. "Institutions and growth in Korea and Taiwan: The bureaucracy," Journal of Development Studies, Taylor & Francis Journals, vol. 34(6), pages 87-111.
    9. Chinn, Menzie D, 2000. "The Usual Suspects? Productivity and Demand Shocks and Asia-Pacific Real Exchange Rates," Review of International Economics, Wiley Blackwell, vol. 8(1), pages 20-43, February.
    10. Nirvikar Singh & Hung Trieu, 1999. "Total Factor Productivity Growth in Japan, South Korea and Taiwan," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 34(2), pages 93-112, July.
    11. Radha Bhattacharya, 1997. "Sources of fluctuations in output: Evidence from small, open economies of Asia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 2(3), pages 378-387.
    12. Yong Glasure & Aie-Rie Lee, 1999. "The export-led growth hypothesis: The role of the exchange rate, money, and government expenditure from Korea," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 27(3), pages 260-272, September.
    13. Mohsen Bahmani-Oskooee & Hyun-Jae Rhee, 1997. "Response of Domestic Production to Depreciation in Korea: an Application of Johansen's Conintegration Methodology," International Economic Journal, Taylor & Francis Journals, vol. 11(4), pages 103-112.
    14. Stephanie Seguino, 1997. "Gender wage inequality and export-led growth in South Korea," Journal of Development Studies, Taylor & Francis Journals, vol. 34(2), pages 102-132.
    15. Mamgain, Vaishali, 1999. "Are the Kaldor-Verdoorn Laws Applicable in the Newly Industrializing Countries?," Review of Development Economics, Wiley Blackwell, vol. 3(3), pages 295-309, October.
    16. Youngil Lim, 1999. "Technology and Productivity: The Korean Way of Learning and Catching Up," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262122219.
    17. Uk Heo, 1999. "Defense Spending and Economic Growth in South Korea: The Indirect Link," Journal of Peace Research, Peace Research Institute Oslo, vol. 36(6), pages 699-708, November.
    18. Booth, Anne, 1999. "Initial Conditions and Miraculous Growth: Why is South East Asia Different From Taiwan and South Korea?," World Development, Elsevier, vol. 27(2), pages 301-321, February.
    19. Yoon Chang-Ho, 1999. "Entrepreneurial Development in Late Industrialization: A Comparative Analysis," International Economic Journal, Taylor & Francis Journals, vol. 13(2), pages 1-20.
    20. Jong-Il You, 1998. "Income distribution and growth in East Asia," Journal of Development Studies, Taylor & Francis Journals, vol. 34(6), pages 37-65.
    21. Francis J. Cronin & Elisabeth Colleran & Mark Gold, 1997. "Telecommunications, Factor Substitution And Economic Growth," Contemporary Economic Policy, Western Economic Association International, vol. 15(3), pages 21-31, July.
    22. Green, Francis, et al, 1999. "The Role of the State in Skill Formation: Evidence from the Republic of Korea, Singapore, and Taiwan," Oxford Review of Economic Policy, Oxford University Press, vol. 15(1), pages 82-96, Spring.
    23. Fields, Gary S & Yoo, Gyeongjoon, 2000. "Falling Labor Income Inequality in Korea's Economic Growth: Patterns and Underlying Causes," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(2), pages 139-159, June.
    24. Gary S. Fields & Gyeongjoon Yoo, 2000. "Falling Labor Income Inequality In Korea'S Economic Growth: Patterns And Underlying Causes," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(2), pages 139-159, June.
    25. Drysdale, Peter & Huang, Yiping, 1997. "Technological Catch-up and Economic Growth in East Asia and the Pacific," The Economic Record, The Economic Society of Australia, vol. 73(222), pages 201-211, September.
    26. Anita Ghatak, 1998. "Vector autoregression modelling and forecasting growth of South Korea," Journal of Applied Statistics, Taylor & Francis Journals, vol. 25(5), pages 579-592, June.
    27. Ueda, Atsuko, 2000. "A Growth Model of "Miracle" in Korea," Journal of Policy Modeling, Elsevier, vol. 22(1), pages 43-59, January.
    28. Wontack Hong, 1998. "Financing Export-Oriented Catching-Up in Korea: Credit-Rationing, Sustained High Growth and Financial Chaos," International Economic Journal, Taylor & Francis Journals, vol. 12(1), pages 141-153.
    29. Ramachandran, Vijaya, 1996. "Does agriculture really matter? the case of Korea, 1910-1970," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 45, pages 27-54, Julio Dic.
    30. Lee, Jaymin, 1997. "The maturation and growth of infant industries: The case of Korea," World Development, Elsevier, vol. 25(8), pages 1271-1281, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    economic growth; Korean economy; political economy; law and economics;

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    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:cid:wpfacu:74a. 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: (Chuck McKenney). General contact details of provider: http://edirc.repec.org/data/ciharus.html .

    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.