IDEAS home Printed from https://ideas.repec.org/a/taf/intecj/v25y2011i1p1-27.html
   My bibliography  Save this article

The Performance of Industrial Policy: Evidence from Korea

Author

Listed:
  • Jaymin Lee

Abstract

This paper first shows that Korea implemented industrial policy properly, promoting infant industries rather than mature ones. The paper then shows that infant industries promoted by industrial policy have matured over time, as well as grown faster than mature industries not promoted by industrial policy. However, this happened as industrial policy was being lifted, rather than as it was being implemented. The paper also shows that, although industrial policy may pay off more easily than previously thought, Korean industrial policy fails to pay off because it distorted the price mechanism too severely and for too long. The analysis of the paper suggests that industrial policy in latecomer countries, when implemented to address market failure, should be much more moderate than what Korea implemented.

Suggested Citation

  • Jaymin Lee, 2011. "The Performance of Industrial Policy: Evidence from Korea," International Economic Journal, Taylor & Francis Journals, vol. 25(1), pages 1-27.
    • Handle: RePEc:taf:intecj:v:25:y:2011:i:1:p:1-27
    DOI: 10.1080/10168737.2011.550122
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/10168737.2011.550122
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10168737.2011.550122?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Harrison, Ann E. & Rodriguez-Clare, Andres, 2009. "Trade, Foreign Investment, and Industrial Policy," MPRA Paper 15561, University Library of Munich, Germany.
    2. Harrison, Ann & Rodríguez-Clare, Andrés, 2010. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4039-4214, Elsevier.
    3. Il SaKong, 1993. "Korea in the World Economy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 29, January.
    4. Dani Rodrik, 2008. "Normalizing Industrial Policy," World Bank Publications - Books, The World Bank Group, number 28009.
    5. 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, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kristine Farla, 2015. "Industrial Policy for Growth," Journal of Industry, Competition and Trade, Springer, vol. 15(3), pages 257-282, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lane, Nathaniel, 2016. "Manufacturing Revolutions: Industrial Policy and Industrialization in South Korea," SocArXiv 6tqax, Center for Open Science.
    2. Hallegatte, Stephane & Fay, Marianne & Vogt-Schilb, Adrien, 2013. "Green industrial policies : when and how," Policy Research Working Paper Series 6677, The World Bank.
    3. Nathan, Max & Rosso, Anna, 2014. "Mapping information economy businesses with big data: findings from the UK," LSE Research Online Documents on Economics 60615, London School of Economics and Political Science, LSE Library.
    4. Vu, Khuong & Hartley, Kris, 2018. "Promoting smart cities in developing countries: Policy insights from Vietnam," Telecommunications Policy, Elsevier, vol. 42(10), pages 845-859.
    5. Philippe Aghion & Jing Cai & Mathias Dewatripont & Luosha Du & Ann Harrison & Patrick Legros, 2022. "Industrial Policy and Competition," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 15, pages 349-380, World Scientific Publishing Co. Pte. Ltd..
    6. 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.
    7. Johannes Boehm & Swati Dhingra & John Morrow, 2022. "The Comparative Advantage of Firms," Journal of Political Economy, University of Chicago Press, vol. 130(12), pages 3025-3100.
    8. Olivier N. Godart & Holger Görg, 2016. "Suppliers of multinationals and the forced linkage effect: Evidence from firm level data," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT, chapter 15, pages 277-288, World Scientific Publishing Co. Pte. Ltd..
    9. Marcus Noland, 2007. "South Korea's Experience with International Capital Flows," NBER Chapters, in: Capital Controls and Capital Flows in Emerging Economies: Policies, Practices, and Consequences, pages 481-528, National Bureau of Economic Research, Inc.
    10. Michaud, Amanda & Rothert, Jacek, 2014. "Optimal borrowing constraints and growth in a small open economy," Journal of International Economics, Elsevier, vol. 94(2), pages 326-340.
    11. Nathan, Max & Rosso, Anna, 2014. "Mapping information economy businesses with big data: findings from the UK," LSE Research Online Documents on Economics 60615, London School of Economics and Political Science, LSE Library.
    12. Farole, Thomas & Moberg, Lotta, 2014. "It worked in China, so why not in Africa? The political economy challenge of Special Economic Zones," WIDER Working Paper Series 152, World Institute for Development Economic Research (UNU-WIDER).
    13. Wacker, Konstantin M. & Großkurth, Philipp & Lakemann, Tabea, 2014. "Terms of Trade, Foreign Direct Investment, and Development: A Case of Intra-Asian “Kicking Away the Ladder”?," Working Papers on Regional Economic Integration 122, Asian Development Bank.
    14. Marcela Meléndez Arjona & Guillermo Perry, 2009. "Industrial policies in Colombia," Working Papers Series. Documentos de Trabajo 9138, Fedesarrollo.
    15. Antonio Martuscelli & Michael Gasiorek, 2019. "Regional Integration And Poverty: A Review Of The Transmission Channels And The Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 431-457, April.
    16. Jacob, Jojo & Sasso, Simone, 2015. "Foreign direct investment and technology spillovers in low and middle-income countries: A comparative cross-sectoral analysis," MERIT Working Papers 2015-035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    17. Johannes Boehm & Swati Dhingra & John Morrow, 2019. "The Comparative Advantage of Firms," Sciences Po publications 2019-07, Sciences Po.
    18. John Page, 2016. "Industry in Tanzania: Performance, prospects, and public policy," WIDER Working Paper Series wp-2016-5, World Institute for Development Economic Research (UNU-WIDER).
    19. Jie Bai & Ludovica Gazze & Yukun Wang, 2019. "Collective Reputation in Trade: Evidence from the Chinese Dairy Industry," NBER Working Papers 26283, National Bureau of Economic Research, Inc.
    20. Cagé, Julia & Rouzet, Dorothée, 2015. "Improving “national brands”: Reputation for quality and export promotion strategies," Journal of International Economics, Elsevier, vol. 95(2), pages 274-290.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:intecj:v:25:y:2011:i:1:p:1-27. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RIEJ20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.