Evolution of Science and Technology Policy in Korea

Chuk Kyo Kim 한양대학교 경제연구소 1994 경제연구 Vol.15 No.2

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Development of Industrial Subcontracting in Korea

Kim, Chuk Kyo,Won, Jong Wook 한양대학교 경제연구소 1997 경제연구 Vol.18 No.1

Industrial Development and Science and Technology Policy in Taiwan

Chuk Kyo Kim 한양대학교 경제연구소 1995 경제연구 Vol.16 No.2

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Emergence of WTO and Its Implications for Developing Countries

Kim, Chuk Kyo 한양대학교 경제연구소 1999 경제연구 Vol.20 No.2

Exports and Productivity Trends of Korean Manufacturing Industries

Kim, Chuk Kyo 연세대학교 동서문제연구소 1974 東西硏究 JOURNAL OF EAST AND WEST STUDIES Vol.3 No.2

Using the Korean Standard Industrial Classification, we have classified manufacturing industries existing between 1966 and 1972 into three different categories: export, import substitution, and domestic industries. Productivity is measured in term of labor, capital, and total factor productivities for each sector of manufacturing. Inter0sectoral productivity comparisons are also made in order to assess the export performance of the Korean economy in terms of efficiency of resource allocation during this period. Our findings can be summarized as follows: 1) The productivity growth of the export industries as a whole was very low as compared with their export performance. Total factor productivity based on the 1968 capital input series, for example, showed and average annual growth rate 6.9 percent, while exports and output grew at average annual rates of 38.0 and 27.2 percent respectively, implying that productivity growth did not play any significant role in export performance. The weighted total productivity growth is much lower(5.2 percent), suggesting that productivity gains in terms of increase in efficiency within individual industries made little contribution to rapid export performance during 1966-72. 2) Out of twelve export industries at the 2-digit level, the highest productivity growth was observed in electrical machinery and apparatus which showed an average annual growth rate of 29.8percent between 1966 and 1972. Rapid productivity gains were also registered in such export industries as leather products(29.1%), metal products(13.0), textiles(12.4%), rubber products(7.0%), and wood products(7.8%). All other industries show either a low or negative productivity growth. Industries showing negative productivity growth were footwear and made-up textiles(-0.3%) and machinery(-7.6%). 3) Export growth was more highly correlated with output growth than with total factor productivity growth. The coefficients of correlation between export and output growth was high for all export industries except basic metal industries, machinery and other manufacturing. However, high coefficients of correlation between exports and productivity were observed only in such leading export industries as textiles, wood and metal products, and electrical machinery and apparatus. These statistical results seem to demonstrate that productivity growth has not played any significant role in the overall export performance of manufacturing industries during the period 1966~72. This is further confirmed by the fact that the growth of total factor productivity accounts for only 25% of output growth in the export sector, suggesting that the export growth of 38% during 1966~72 was largely caused by factors other than productivity changes. 4) As far as productivity comparisons among the export, import substitution, and domestic sectors are concerned, the export sector showed the least total factor productivity growth. Productivity growth in the domestic sector was the highest, followed by the import substitution sector. In the case of weighted total factor productivity, the lowest productivity gains are observed in the import substitution sector. This is due to the fact that between 1966 and 1972 the import substitution sector underwent rapid structural change while in the domestic and export sector no such structural changes took place. The high productivity growth in domestic and import substitution sectors seems largely attributable to economies of scale, and the increased efficiency stemming from competition and better management. By contrast, many export industries are relatively small-scale and are equipped with traditional technologies. Furthermore, a variety of direct and indirect subsidies extend to the export industries have to some extent distorted their investment decisions, leading to excessive investment. A rapid increase in capital intensity in the export sector seems to reflect this phenomenon. 5) We have also demonstrated that the low rate of growth of total factor productivity in the export sector is to a large extent due to low productivity growth of capital. A country where labor is abundant relative to capital should economize on capital rather than labor. Unfortunately, this capital saving tendency has not been observed in the Korean export industries. Therefore, efforts should be made to make better use of capital by means of more efficient management and utilization of existing capacity. 6) The labor share of income in the export sector has slightly decreased from 39.7% to 38.7% between 1966 and 1972. But the labor share of income in the manufacturing sector as a whole remained fairly stable between 1966 and 1972. However, it is remarkable that in all sectors the labor share of income has been decreasing since 1970. The falling labor share since 1970 seems partly due to luggish economic activities in 1971 and 1972, and therefore is not likely to continue in the future. Nevertheless, more efforts should be made to improve the functional income distribution in manufacturing industries. We have demonstrated that the Korean export industries in general suffer from low productivity as compared with the industries oriented toward the domestic market. On the productivity side, however, there are a number of industries showing a high productivity growth such as electrical machinery and apparatus, leather and metal products, and textiles, all of which are mostly labor intensive. At the moment, the comparative advantage doctrine seems to work for Korea's labor-intensive industries, with the implication that a Heckscher-Ohlin type of factor intensity theorem is quite tenable. However, in view of the relatively low productivity growth as compared with domestic and import substitution sectors, steps are urgently needed to enhance productivity in the export sector not only by means of more efficient capacity utilization buy also through on-the-job training, better management, etc. Further efforts should also be made to improve the productivity of such capital-intensive industries as machinery and basic metals which are likely to constitute and increasing portion of exports in the future. In a rapidly growing economy like Korea where resources are not fully utilized, it seems rather natural that in the initial stage of development productivity assumes a relatively less important role as compared with factor inputs. A pattern of high economic growth heavily relying on increases in factor inputs, however, cannot be maintained in the long run because of increasing resource limitations. This is particularly true in the case of export industries which must also cope with severe competition in the world market. It seems that the Korean export industries are through the initial stage of growth and gradually approaching a stage during which productivity growth will play a major role in export promotion. Therefore, the basic objective of future export promotion policies should be focused on productivity improvements in existing as well as in potential export industries.

Evolution of Trade and Industrial Policy in Korea

Kim, Chuk Kyo 한양대학교 경제연구소 1998 경제연구 Vol.19 No.1

우리나라 제조업의 성장과 생산성 추이

김적교 (Chuk Kyo Kim) 한양대학교 경제연구소 1982 경제연구 Vol.3 No.2

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Government Policy and Industrial Innovation in Korea

김적교 한양대학교 경제연구소 1988 경제연구 Vol.9 No.1

한국 전자공업의 기술수준 격차의 측정에 관한 연구

김적교,김재원 한양대학교 경제연구소 1986 경제연구 Vol.7 No.1

빈곤층과 비빈곤층간의 소득분배

김적교 한양대학교 경제연구소 1987 경제연구 Vol.8 No.2