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Manufacturing Revolutions: Industrial Policy and Industrialization in South Korea

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  • Lane, Nathaniel

Abstract

I study the impact of industrial policies on industrial development by considering an important episode during the East Asian miracle: South Korea's heavy and chemical industry (HCI) drive, 1973--1979. Based on newly assembled data, I use the introduction and termination of industrial policies to study their impacts during and after the intervention period. (1) I reveal that heavy-chemical industrial policies promoted the expansion and dynamic comparative advantage of directly targeted industries. (2) Using variation in exposure to policies through the input-output network, I demonstrate that the policy indirectly benefited downstream users of targeted intermediates. (3) The benefits of HCI persisted even after the policy ended, as some results were slower to appear. The findings suggest that the temporary drive shifted Korean manufacturing into more advanced markets and supported durable change. This study helps clarify the lessons drawn from the East Asian growth miracle.

Suggested Citation

  • Lane, Nathaniel, 2025. "Manufacturing Revolutions: Industrial Policy and Industrialization in South Korea," EconStor Research Reports 318267, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esrepo:318267
    DOI: 10.31235/osf.io/6tqax
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    More about this item

    Keywords

    industrial policy; big push; East Asian miracle; industrial development;
    All these keywords.

    JEL classification:

    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • N6 - Economic History - - Manufacturing and Construction

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