Global Competition, Technology Spillovers and Firm Dynamics:

Competition has pervasive and long-lasting effects on economic performance by affecting economic actors’ incentive structures, by encouraging their innovative activities, by stimulating technology spillovers, and by selecting more efficient firms from less efficient ones over time. A growing number of empirical studies using longitudinal micro-data confirm that firm dynamics (i.e., entry and exit, growth and decline of individual firms) is an important component of innovation and of aggregate productivity growth. The dynamism of Asian NIEs (Newly Industrializing Economies) revealed in their export-oriented growth paths has drawn substantial attention from researchers. But, empirical studies based on longitudinal micro-data in Asia are still rare, mainly due to the lack of readily available data. Based on the unpublished plant-level data underlying the Annual Report on Mining and Manufacturing Survey of Korea (1980-2000), this study proposes to assess the links between competition, technology spillovers, and firm dynamics in Korea. This research aims to contribute to understanding the micro-level innovation/selection processes of export-oriented economies in Asia over economic fluctuations under intensifying global competition