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Manufacturing Revolutions: Industrial Policy and Industrialization in South Korea

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  • Lane, Nathan

Abstract

I study the impact of industrial policy on industrial development by consid- ering an important episode during the East Asian miracle: South Korea’s heavy and chemical industry (HCI) drive, 1973–1979. Based on newly assembled data, I use the introduction and termination of industrial policies to study their impacts during and after the intervention period. (1) I reveal that the heavy-chemical industrial policies promoted the expansion and dynamic comparative advantage of directly targeted industries. (2) Using variation in exposure to policies through the input-output network, I demonstrate that policy indirectly benefited down- stream users of targeted intermediates. (3) The benefits of HCI persisted even after it ended, some of which took time to manifest. These findings suggest that the temporary drive shifted Korean manufacturing into more advanced markets and supported durable change. This study helps clarify the lessons drawn from the East Asian growth miracle

Suggested Citation

  • Lane, Nathan, 2016. "Manufacturing Revolutions: Industrial Policy and Industrialization in South Korea," MPRA Paper 122277, University Library of Munich, Germany, revised 30 Sep 2024.
    • Handle: RePEc:pra:mprapa:122277
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    References listed on IDEAS

    as
    1. Krueger, Anne O & Tuncer, Baran, 1982. "An Empirical Test of the Infant Industry Argument," American Economic Review, American Economic Association, vol. 72(5), pages 1142-1152, December.
    2. Wontack Hong, 1987. "Export-Oriented Growth and Trade Patterns of Korea," NBER Chapters, in: Trade and Structural Change in Pacific Asia, pages 273-306, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    ndustrial policy; East Asian miracle; economic history; industrial development; Heavy-Chemical Industry Drive; Heavy and Chemical Industry Drive;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • N6 - Economic History - - Manufacturing and Construction
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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