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Selective Intervention and Growth: The Case of Korea

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  • Marcus Noland

    () (Peterson Institute for International Economics)

Abstract

This paper attempts to determine whether conditions amendable to successful selective interventions to capture cross-industry externalities are likely to be fulfilled in practice. Three criteria are proposed for good candidates for industrial promotion: that they have strong interindustry links to the rest of the economy, that they lead the rest of the economy in a causal sense, and that they be characterized by a high share of industry-specific innovations in output growth. According to these criteria, likely candidates for successful intervention are identified in the Korean data. It is found that, with one exception, none of the sectors promote by the heavy and chemical industry (HCI) policy fulfills all three criteria.

Suggested Citation

  • Marcus Noland, 2004. "Selective Intervention and Growth: The Case of Korea," Working Paper Series WP04-3, Peterson Institute for International Economics.
  • Handle: RePEc:iie:wpaper:wp04-3
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    References listed on IDEAS

    as
    1. Pack, Howard, 2000. "Industrial Policy: Growth Elixir or Poison?," World Bank Research Observer, World Bank Group, vol. 15(1), pages 47-67, February.
    2. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
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    4. Okuno-Fujiwara, Masahiro, 1988. "Interdependence of industries, coordination failure and strategic promotion of an industry," Journal of International Economics, Elsevier, vol. 25(1-2), pages 25-43, August.
    5. Lee, Jong-Wha, 1996. "Government Interventions and Productivity Growth," Journal of Economic Growth, Springer, vol. 1(3), pages 391-414, September.
    6. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
    7. James H. Stock & Mark W. Watson, 1987. "Interpreting Evidence on Money-Income Causality," NBER Working Papers 2228, National Bureau of Economic Research, Inc.
    8. Leroy P. Jones, 1976. "The Measurement of Hirschmanian Linkages," The Quarterly Journal of Economics, Oxford University Press, vol. 90(2), pages 323-333.
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    12. Marcus Noland & Howard Pack, 2003. "Industrial Policy in an Era of Globalization: Lessons from Asia," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 358.
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    Cited by:

    1. Marcus Noland & Howard Pack, 2002. "Industrial Policies and Growth: Lessons From International Experience," Central Banking, Analysis, and Economic Policies Book Series,in: Norman Loayza & Raimundo Soto & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.), Economic Growth: Sources, Trends, and Cycles, edition 1, volume 6, chapter 9, pages 251-308 Central Bank of Chile.
    2. Monica de Bolle, 2015. "Do Public Development Banks Hurt Growth? Evidence from Brazil," Policy Briefs PB15-16, Peterson Institute for International Economics.
    3. Marcus Noland & Howard Pack, 2005. "The East Asian Industrial Policy Experience: Implications for the Middle East," Working Paper Series WP05-14, Peterson Institute for International Economics.

    More about this item

    Keywords

    Korea; industrial policy; growth;

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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