The Effect of Imports and Exports on Total Factor Productivity in Korea (original) (raw)
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Imports, exports and total factor productivity in Korea
Applied Economics, 2009
This study investigates the relationship between trade and economic growth in Korea during the period 1980~2003. The empirical results suggest the existence of Granger causality running from imports to total factor productivity (TFP) growth, and the absence of any causal relation between exports and TFP. In light of this causal relationship between imports and TFP growth, TFP growth is regressed on various trade variables, along with R&D investments and government size. The results indicate that imports have significant positive effects on TFP but that exports do not. The results also indicate that the salutary impact of imports on TFP growth stems not only from competitive pressure and new knowledge acquired from foreign rivals in the context of increased imports of final goods but also from technological transfers embodied by imports from developed countries. Most of the empirical results still hold when TFP growth is replaced with GDP growth.
Estimates of Labor and Total Factor Productivity by 72 Industries in Korea (1970–2003)
Productivity Measurement and Analysis, 2009
As Krugman (1994), Young (1994), and Lau and Kim (1994)'s studies showed, the East Asian economic miracle may be characterized as `input-led' growth. However, both the stagnation in investment and the decrease in average working hours combined with decrease in the fertility rate require a productivity surge for a renewed sustainable growth in East Asia. The purpose of our study is to identify the sources of economic growth based on a KLEMS model for the Republic of Korea which experienced a financial crisis in 1997 after joining OECD. We report estimates of KLEMS inputs and gross output in Korea based on preliminary dataset of 72industry classification following EU KLEMS project guidelines. We also provide estimates of 72 industry-level labor productivity and total factor productivity. We have found that Korea's catch-up process with industrial nations in its late industrialization has been predominantly input-led and manufacturing based as documented in Timmer(1999) and Pyo (2001). We have also found that TFP growth has been positively affected by the growth of labor productivity and output growth. However, since its financial crisis in December 1997, the sources of growth seem to have switched to TFP-growth based and IT-intensive Service based. But lower productivity in service industries due to regulations and lack of competition seems to work against finding renewed sustainable growth path.
Estimates of Labor and Total Factor Productivity by 72 industries in Korea (1970-2004)
As Krugman (1994), Young (1994), and Lau and Kim (1994)'s studies showed, the East Asian economic miracle may be characterized asinput-led' growth. However, both the stagnation in investment and the decrease in average working hours combined with decrease in the fertility rate require a productivity surge for a renewed sustainable growth in East Asia. The purpose of our study is to identify the sources of economic growth based on a KLEMS model for the Republic of Korea which experienced a financial crisis in 1997 after joining OECD. We report estimates of KLEMS inputs and gross output in Korea based on preliminary dataset of 72- industry classification following EU KLEMS project guidelines. We also provide estimates of 72 industry-level labor productivity and total factor productivity. We have found that Korea's catch-up process with industrial nations in its late industrialization has been predominantly input-led and manufacturing based as documented in Timmer(1999) ...
Export-total factor productivity growth nexus in East Asian economies
Applied Economics, 2009
Despite increasing interest in the relationship between trade and macroeconomic performance in development economics, very limited studies have been conducted on the causal links between exports and productivity growth in Asian economies. This paper examines empirically the interplay between exports and productivity growth for eight East Asian economies in a multivariate framework by applying bound tests and modified Wald tests. The results indicate that causality is bi-directional in the case of Korea, Singapore and Taiwan, while unidirectional from productivity to exports for Mainland China, Hong Kong, Indonesia, Malaysia and the Philippines. These findings provide little support for the conventional export-led growth hypothesis.
The End of Import-Led Growth? North Korean Evidence
Discussion Papers in Economics and Business, 2007
In this paper, we investigate causal relationships among exports, imports, and economic growth in North Korea by using time series data for the period between 1964 and 2004. The empirical results show that there was Granger causality from imports to GNP in the first half of the period. However, there was a causal relationship from GNP to imports in the second half of the period. This implies that economic growth stimulates imports in North Korea. The North Korean economy escaped its import-led growth situation, which some socialist economies had experienced.
Gains from trade and measured total factor productivity
Review of Economic Dynamics, 2011
We develop and calibrate a model where differences in factor endowments lead countries to trade different goods, so that the existence of international trade changes the sectorial composition of output from one country to another. Gains from trade reflect in total factor productivity. We perform a development decomposition, to assess the impact of trade-and barriers to trade-on measured TFP. In our sample, the median size of that effect is about 6.5% of output, with a median of 17% and a maximum of 89%. Also, the model predicts that changes in the terms of trade cause a change of productivity, and that effect has an average elasticity of 0.71.
Is output growth of Korean manufacturing firms productivity-driven?
Journal of Asian Economics, 2003
This paper examines the sources of output growth and total factor productivity (TFP) growth of four selected South Korean manufacturing industries from 1980 to 1994. Unlike previous studies, this study is enriched by the use of firm level data within each industry and the application of the random coefficient frontier model. Empirical results show that output growth in the manufacturing industries is increasingly productivity-driven. But the varying sources of TFP growth (i.e. technical progress and gains in technical efficiency) within the industries present an urgent need to reexamine the effect of government policies and other factors to formulate specific policies for sustainable TFP growth. #
Does Productivity Cause Exports or vice versa
2007
Empirical evidence linking exports and productivity growth has been mixed and inconclusive. This study re-examines the direction of the causality between them for Malaysian industries by testing for Granger causality using the error-correction and earlier vector autoregressive models. By including other variables like size and capital intensity in my models, I have captured the indirect effects besides the direct effects between exports and productivity. In a panel of 63 manufacturing industries, for the period of 1981 to 1999, I find that these industries support the export-led growth hypotheses, not the growth-driven export hypothesis. However, a further look into the results indicates that there is a possibility of an indirect causality from productivity growth to export through size, as productivity cause size and size, in turn cause exports.
The purpose of our study is to identify sources of economic growth for the Republic of Korea, which experienced a financial crisis in 1997 after joining the OECD. We provide estimates of output, input, and productivity based on the newly constructed Korea Industrial Productivity (KIP) database following EU KLEMS project guidelines. We find that Korea's catch-up process with industrial nations during its period of late industrialization has been predominantly input-led and manufacturing-based. However, following the financial crisis in December 1997, the Korean economy growth seems to have shifted to productivity-led growth. However, lower productivity in the service industries seems to work against a renewed sustainable growth path.
Does Trade Policy Explain Total Factor Productivity Differences Across Countries
2012
This study examines whether variations in restrictiveness of trade policy on the flow of international trade explain Total Factor Productivity (TFP) differences across countries. The study employs Trade Restrictiveness Indices (TRIs) to measure trade policy. The TRIs are aggregated using data at the tariff line level, which enable the study to overcome the aggregation bias characterizing the commonly used trade policy measures such as average tariff and import-weighted average tariff. TRIs for Non-Tariff Barriers on imports (NTB), import tariffs and export restrictions are used to show the relative restrictiveness of various types of trade policy on TFP. In line with the political economy literature, the trade restrictiveness measure based on NTB is instrumented using past trade shares while identifying the former’s effect on TFP. Using IV regression, the study shows that trade restrictiveness based on NTB explains a significant variation in TFP across countries while trade restrict...