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Government Interventions and Productivity Growth in Korean ManufacturingIndustries


  • Jong-Wha Lee


This paper investigates the impact of government industrial policy and trade protection of the manufacturing sector in Korea. Empirical results are provided, using 4-period panel data for the years 1963-83, for 38 Korean industries in which trade protection reduced growth rates of labor productivity and total factor productivity, while industrial policies, such as tax incentives and subsidized credit, were not correlated with total factor productivity growth in the promoted sectors. The evidence, thus, implies that less government intervention in trade is linked to higher productivity growth.

Suggested Citation

  • Jong-Wha Lee, 1995. "Government Interventions and Productivity Growth in Korean ManufacturingIndustries," NBER Working Papers 5060, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5060
    Note: EFG ITI

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    References listed on IDEAS

    1. Barro, Robert J. & Lee, Jong-Wha, 1994. "Sources of economic growth," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 1-46, June.
    2. Deepak Lal, 1993. "Poverty and Development," UCLA Economics Working Papers 707, UCLA Department of Economics.
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    4. Jong-Wha Lee, 1993. "International Trade, Distortions, and Long-Run Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 40(2), pages 299-328, June.
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    6. Rudiger Dornbusch & Yung Chul Park, 1987. "Korean Growth Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(2), pages 389-454.
    7. Susan M. Collins & Won-Am Park, 1989. "II. External Debt and Macroeconomic Performance in South Korea," NBER Chapters,in: Developing Country Debt and Economic Performance, Volume 3: Country Studies - Indonesia, Korea, Philippines, Turkey, pages 151-152 National Bureau of Economic Research, Inc.
    8. Alwyn Young, 1992. "A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore," NBER Chapters,in: NBER Macroeconomics Annual 1992, Volume 7, pages 13-64 National Bureau of Economic Research, Inc.
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    Cited by:

    1. L. Alan Winters, 2000. "Trade Liberalisation and Poverty," PRUS Working Papers 07, Poverty Research Unit at Sussex, University of Sussex.
    2. Jhang, Kwang-soo, 1996. "Productivity performance in Korean manufacturing industries," ISU General Staff Papers 1996010108000017622, Iowa State University, Department of Economics.
    3. Jin, Jang C., 2006. "Can openness be an engine of sustained high growth rates and inflation?: Evidence from Japan and Korea," International Review of Economics & Finance, Elsevier, vol. 15(2), pages 228-240.
    4. Fernandes, Ana M., 2007. "Trade policy, trade volumes and plant-level productivity in Colombian manufacturing industries," Journal of International Economics, Elsevier, vol. 71(1), pages 52-71, March.
    5. Akinlo, Anthony Enisan, 2005. "Impact of Macroeconomic Factors on Total Factor Productivity in Sub-Saharan African Countries," WIDER Working Paper Series 039, World Institute for Development Economic Research (UNU-WIDER).
    6. Jin, Jang C., 2006. "Openness, growth, and inflation: Evidence from South Korea before the economic crisis," Journal of Asian Economics, Elsevier, vol. 17(4), pages 738-757, October.
    7. Crafts, Nicholas, 2000. "Development history," Economic History Working Papers 22384, London School of Economics and Political Science, Department of Economic History.
    8. June-Dong Kim & Sang-In Hwang, 2000. "The Role of Foreign Direct Investment in Korea's Economic Development: Productivity Effects and Implications for the Currency Crisis," NBER Chapters,in: The Role of Foreign Direct Investment in East Asian Economic Development, NBER-EASE Volume 9, pages 267-294 National Bureau of Economic Research, Inc.
    9. Robert Z. Lawrence & David E. Weinstein, 1999. "Trade and Growth: Import-Led or Export-Led? Evidence From Japan and Korea," NBER Working Papers 7264, National Bureau of Economic Research, Inc.
    10. Donald Hay, 2015. "Industrial Policy in Brazil: a Framework," Discussion Papers 0074, Instituto de Pesquisa Econômica Aplicada - IPEA.

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