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Could Imports be Beneficial for Economic Growth? Some Evidence from Republic of Korea

Author

Listed:
  • Kim, Sangho

    (Honam University)

  • Lim, Hyunjoon

    (University of Rochester)

  • Park, Donghyun

    (Asian Development Bank)

Abstract

The Republic of Korea is widely seen as a classical example of East Asia's export-driven economic growth. The focus in the literature on exports in the economy's growth has led to an almost complete neglect of the role of imports. This study investigates the relationship between exports, imports, and economic growth using quarterly data from 1980 to 2003. Results indicate that imports have a significant positive effect on productivity growth but exports do not. Furthermore, the evidence reveals that the productivity-enhancing impact of imports is due to competitive pressures arising from consumer good imports and technological transfers embodied in capital good imports from developed countries. Most of the study's results still hold using gross domestic product growth rather than productivity growth as the measure of economic growth. The evidence implies that under certain circumstances, import liberalization can make a positive and significant contribution to growth and development.

Suggested Citation

  • Kim, Sangho & Lim, Hyunjoon & Park, Donghyun, 2007. "Could Imports be Beneficial for Economic Growth? Some Evidence from Republic of Korea," ADB Economics Working Paper Series 103, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0103
    as

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    References listed on IDEAS

    as
    1. Marc-Andreas Muendler, 2004. "Trade, Technology, and Productivity: A Study of Brazilian Manufacturers, 1986-1998," CESifo Working Paper Series 1148, CESifo.
    2. Xu, Zhenhui, 1996. "On the Causality between Export Growth and GDP Growth: An Empirical Reinvestigation," Review of International Economics, Wiley Blackwell, vol. 4(2), pages 172-184, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    economic growth; imports; productivity growth; Republic of Korea; trade;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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