IDEAS home Printed from https://ideas.repec.org/p/ana/wpaper/15002.html
   My bibliography  Save this paper

New Lessons from an Old Strategy: Import Substitution, Productivity and Competitiveness

Author

Listed:
  • Yilmaz Kilicaslan

    (Anadolu University, Department of Economics)

  • Ilhom Temurov

    (Anadolu University, Department of Economics)

Abstract

This paper examines the relation between import substitution, labour productivity and industrial competitiveness. More specifically this paper tests if the import substitution enhances both labour productivity and competitiveness in Korean and Turkish manufacturing industries. The data used in the analysis are obtained from UNIDO Industrial Demand Supply (2013) and UNIDO Industrial Statistics (2013) databases and cover the period of 1981-2001. Our results show that Turkish economy has really left import substitution after 1980. However, we found significant share of import substitution in total production in professional and scientific equipment, transportation equipment, electrical machinery, miscellaneous petroleum products, industrial chemicals industries and petroleum refineries in Korea especially in the 1990s. The results based on unbalanced dynamic panel data estimations showed that import substitution did not enhance labour productivity in manufacturing industry of both Korea and Turkey. However, we found that import substitution affects industrial competitiveness positively in both Korea and Turkey. Apart from the positive impact of import substitution on competitive-ness, we also found in this study that while Korean manufacturing industry competitiveness is closely associated with labour productivity, competitiveness of Turkish manufacturing industry depends on the factors such as exchange rates, wage differentials rather than labour productivity.

Suggested Citation

  • Yilmaz Kilicaslan & Ilhom Temurov, 2015. "New Lessons from an Old Strategy: Import Substitution, Productivity and Competitiveness," EconWorld Working Papers 15002, WERI-World Economic Research Institute, revised Dec 2015.
    • Handle: RePEc:ana:wpaper:15002
    DOI: 10.22440/EconWorld.WP.2015.002
    as

    Download full text from publisher

    File URL: https://wp.econworld.org/wp-content/uploads/2016/06/WP2015002.pdf
    File Function: First version, 2015
    Download Restriction: no
    File URL: https://libkey.io/10.22440/EconWorld.WP.2015.002?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
    ---><---

    References listed on IDEAS

    as
    1. Carlin, Wendy & Glyn, Andrew & Van Reenen, John, 2001. "Export Market Performance of OECD Countries: An Empirical Examination of the Role of Cost Competitiveness," Economic Journal, Royal Economic Society, vol. 111(468), pages 128-162, January.
    2. M. Teresa Costa-Campi & Elisabet Viladecans-Marsal, 1999. "The District Effect and the Competitiveness of Manufacturing Companies in Local Productive Systems," Urban Studies, Urban Studies Journal Limited, vol. 36(12), pages 2085-2098, November.
    3. Yılmaz Kılıç aslan & Erol Taymaz, 2009. "Labor market institutions and industrial performance: an evolutionary study," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 207-222, Springer.
    4. Fane, George, 1973. "Consistent Measures of Import Substitution," Oxford Economic Papers, Oxford University Press, vol. 25(2), pages 251-261, July.
    5. Pierre-Richard Agénor, 1997. "Competitiveness and external trade performance of the French manufacturing industry," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(1), pages 103-133, March.
    6. Krueger, Anne O, 1997. "Trade Policy and Economic Development: How We Learn," American Economic Review, American Economic Association, vol. 87(1), pages 1-22, March.
    7. Timothy J. Bartik, 1995. "Economic Development Strategies," Upjohn Working Papers 95-33, W.E. Upjohn Institute for Employment Research.
    8. Guillaumont, Patrick, 1979. "More on Consistent Measures of Import Substitution," Oxford Economic Papers, Oxford University Press, vol. 31(2), pages 324-329, July.
    9. Teitel, Simon & Thoumi, Francisco E, 1986. "From Import Substitution to Exports: The Manufacturing Exports Experience of Argentina and Brazil," Economic Development and Cultural Change, University of Chicago Press, vol. 34(3), pages 455-490, April.
    10. Claudio Sapelli, 2003. "The Political Economics of Import Substitution Industrialization," Documentos de Trabajo 257, Instituto de Economia. Pontificia Universidad Católica de Chile..
    11. Puga, Diego & Venables, Anthony J, 1999. "Agglomeration and Economic Development: Import Substitution vs. Trade Liberalisation," Economic Journal, Royal Economic Society, vol. 109(455), pages 292-311, April.
    12. Morley, Samuel A & Smith, Gordon W, 1971. "Import Substitution and Foreign Investment in Brazil," Oxford Economic Papers, Oxford University Press, vol. 23(1), pages 120-135, March.
    13. Bela Balassa, 1971. "Industrial policies in Taiwan and Korea," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 106(1), pages 55-77, March.
    14. Franco, Ana Maria & Baumann, Renato, 2006. "Import substitution in Brazil between 1995 and 2000," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    15. Desai, Padma, 1969. "Alternative Measures of Import Substitution," Oxford Economic Papers, Oxford University Press, vol. 21(3), pages 312-324, November.
    16. Douglas A. Irwin, 2002. "Did Import Substitution Promote Growth in the Late Nineteenth Century?," NBER Working Papers 8751, National Bureau of Economic Research, Inc.
    17. Morley, Samuel A & Smith, Gordon W, 1970. "On the Measurement of Import Substitution," American Economic Review, American Economic Association, vol. 60(4), pages 728-735, September.
    18. Paolo Guerrieri Paleotti & Paola Maggiolini & Gennaro Zezza, 1998. "The Dynamics of International Competitiveness: First Results from an Analysis at the Industry Level," LABOUR, CEIS, vol. 12(2), pages 239-253, July.
    Full references (including those not matched with items on IDEAS)

    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. Markaki, Maria & Papadakis, Stelios, 2024. "Productive Structure Optimization under Macroeconomic Constraints based on Input-Output Analysis," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 91-105.
    2. Pavel Kadochnikov, 2006. "An Analysis of Import Substitution in Russia after the 1998 Crisis," Research Paper Series, Gaidar Institute for Economic Policy, issue 95, pages 148-148.
    3. LIN, Ko Min & PLASMANS, Joseph & HSU, Song-ken, 2014. "A consistent measure of aggregate import substitution," Working Papers 2014008, University of Antwerp, Faculty of Business and Economics.
    4. repec:cte:whrepe:wp08-04 is not listed on IDEAS
    5. Robert E. Baldwin, 2004. "Openness and Growth: What's the Empirical Relationship?," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 499-521, National Bureau of Economic Research, Inc.
    6. Ramírez Grajeda, Mauricio & de León Arias, Adrián, 2009. "Spatial implications of international trade under the new economic geography approach," MPRA Paper 18076, University Library of Munich, Germany.
    7. repec:cte:whrepe:wh017204 is not listed on IDEAS
    8. Renato Perim Colistete, 2011. "Revisiting Import-Substitutingindustrialisation In Post-War Brazil," Anais do XXXVIII Encontro Nacional de Economia [Proceedings of the 38th Brazilian Economics Meeting] 203, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    9. repec:cte:whrepe:wp06-08 is not listed on IDEAS
    10. Arta Mulliqi & Nick Adnett & Mehtap Hisarciklilar & Artane Rizvanolli, 2018. "Human Capital and International Competitiveness in Europe, with Special Reference to Transition Economies," Eastern European Economics, Taylor & Francis Journals, vol. 56(6), pages 541-563, November.
    11. Warner Soontiens, 2003. "The Relevance of Non-tariff Barriers to Regional Trade: Experiences of South African Exporters," Global Business Review, International Management Institute, vol. 4(1), pages 1-13, February.
    12. J. Vernon Henderson, Zmarak Shalizi, and Anthony J. Venables, 2001. "Geography and development," Journal of Economic Geography, Oxford University Press, vol. 1(1), pages 81-105, January.
    13. Justin Lin & Peilin Liu, 2006. "Economic Development Strategy, Openness and Rural Poverty: A Framework and China's Experiences," WIDER Working Paper Series RP2006-43, World Institute for Development Economic Research (UNU-WIDER).
    14. Anthony Black, 2011. "Trade Liberalization, Technical Change and Firm Level Restructuring in the South African Automotive Component Sector," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 3(2), pages 173-202, July.
    15. Athukorala, Prema-chandra & Narayanan, Suresh, 2018. "Economic corridors and regional development: The Malaysian experience," World Development, Elsevier, vol. 106(C), pages 1-14.
    16. Ashok S. Guha & Brishti Guha, 2009. "Trade, Growth, and Increasing Returns to Infrastructure: The Role of the Sophisticated Monopolist," Review of International Economics, Wiley Blackwell, vol. 17(5), pages 1053-1065, November.
    17. M.A.Hossain, 2001. "On Export-Led Growth: Is Manufacturing Exports a New Engine of Growth for Bangladesh?," Discussion Papers Series 297, School of Economics, University of Queensland, Australia.
    18. Sarah Guillou, 2006. "Competitiveness and export market shares in high tech industries in the US and the EMU countries: A comparative study," Working Papers hal-03607649, HAL.
    19. Norhayati Yahaya & Mohamad Sattar Rasul & Ruhizan Mohamad Yasin, 2017. "The Marketability of National Dual Training System (NDTS) Graduates in the Industry," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(6), pages 592-611, June.
    20. Baldwin, Richard & Venables, Anthony J., 2015. "Trade policy and industrialisation when backward and forward linkages matter," Research in Economics, Elsevier, vol. 69(2), pages 123-131.
    21. Falvey, Rod & Foster, Neil & Greenaway, David, 2012. "Trade Liberalization, Economic Crises, and Growth," World Development, Elsevier, vol. 40(11), pages 2177-2193.
    22. Henrik Christoffersen & Gert Tinggaard Svendsen, 2002. "Bureaucratic Tax-Seeking: The Danish Waste Tax," Energy & Environment, , vol. 13(3), pages 355-366, July.
    23. Güneş Aşık & Ulaş Karakoç & Şevket Pamuk, 2023. "Regional inequalities and the West–East divide in Turkey since 1913," Economic History Review, Economic History Society, vol. 76(4), pages 1305-1332, November.

    More about this item

    Keywords

    productivity; competitiveness; import substitution; manufacturing; Turkey; Korea;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:ana:wpaper:15002. 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: Unal Tongur The email address of this maintainer does not seem to be valid anymore. Please ask Unal Tongur to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/ewanatr.html .

    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.