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Misallocation and Manufacturing TFP in Korea, 1982-2007

Author

Listed:
  • Minho Kim
  • Jiyoon Oh
  • Yongseok Shin

Abstract

The authors apply the analysis of Hsieh and Klenow (2009) to assess the degree of resource misallocation in the Republic of Korea manufacturing sector from 1982 to 2007. They find improvement in the aggregate allocative efficiency during the first decade and a strong reversal after 1992. This pattern reflects the dynamics of the within-industry distortion measures for most industries and is consistent with the evolving systematic relationship between the age/value added of establishments and their measured idiosyncratic distortions over the sample period. Their finding suggests that the observed dispersion in revenue productivity should not be dismissed as mere artifacts of misspecification or measurement errors.

Suggested Citation

  • Minho Kim & Jiyoon Oh & Yongseok Shin, 2017. "Misallocation and Manufacturing TFP in Korea, 1982-2007," Review, Federal Reserve Bank of St. Louis, vol. 99(2).
    • Handle: RePEc:fip:fedlrv:00082
    DOI: 10.20955/r.2017.233-244
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    References listed on IDEAS

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    1. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
    2. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    3. Moses Abramovitz, 1956. "Resource and Output Trends in the United States since 1870," NBER Books, National Bureau of Economic Research, Inc, number abra56-1, June.
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    Citations

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    Cited by:

    1. Philippe Aghion & Sergei Guriev & Kangchul Jo, 2021. "Chaebols and firm dynamics in Korea [Distance to frontier, selection, and economicgrowth]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(108), pages 593-626.
    2. Weijiang Liu & Mingze Du & Yuxin Bai, 2021. "Mechanisms of Environmental Regulation’s Impact on Green Technological Progress—Evidence from China’s Manufacturing Sector," Sustainability, MDPI, vol. 13(4), pages 1-23, February.
    3. Lee,Yoonsoo, 2020. "Long-Term Shifts in Korean Manufacturing and Plant-Level Productivity Dynamics," Policy Research Working Paper Series 9279, The World Bank.
    4. Choi, Woo Jin & Roh, Woo Jin, 2023. "Service Matters: Capital Misallocation and Sectoral Economic Growth," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 45(1), pages 1-32.

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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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