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What Explains the Recent Global Competitiveness of The Korean Automotive Industry?

Author

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  • Mi-kyung Pai

    (KyungPook National University)

Abstract

EEmpirical results and the global standing of advanced technology of the Korean automotive industry revealed that the competitiveness of the automotive components suppliers is far behind that of assembled vehicle manufacturers. The returns to scale (RTS) of the assembled vehicle manufacturers showed strong increasing return to scale (IRS), whereas the automotive components suppliers displayed decreasing return to scale (DRS). The average total factor productivity (TFP) growth of the assembled vehicle manufacturers was ten times greater than that of the automotive components suppliers in the past decadce. The technical progress (TP) has been a key contributor to the TFP growth of both sectors, but the strength of the capital-using technical progress (TP) of the automotive components suppliers was less than half of that of the assembled vehicle manufacturers. The paradigm shift of the automotive industry urges persistent, collaborative R&D between the two sectors against expeditions commercialization of Next Generation Vechiles (NGV).

Suggested Citation

  • Mi-kyung Pai, 2005. "What Explains the Recent Global Competitiveness of The Korean Automotive Industry?," Korean Economic Review, Korean Economic Association, vol. 21, pages 327-351.
    • Handle: RePEc:kea:keappr:ker-20051231-21-2-09
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    More about this item

    Keywords

    Korean automotive industry; assembled vehicle manufacturers; automotive components suppliers; paradigm shift; total factor productivity; technical progress; technical efficiency; scale components; allocative efficiency;
    All these keywords.

    JEL classification:

    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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