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Determinants of change of the industrial structure : The Korean case

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Frame of Image change rate system, a form of a managed floating exchange rate system. After that, the Korean economy accelerated in its openness & liberalization and started to respond to international economic fluctuation at once. This paper focuses on the period after the increase in economic openness. After the 1990’s, the main features of the industrial structure in Korea is that the de-industrialization in employment proceeded, but not in production. In a d d i t i o n , ICT(Information & Communications Technology) industries grew rapidly2)-see〈Figure 1> and〈Figure 2>. As Baumol(1967) suggested, an increase in interindustry differences in labor productivity effects on de-industrialization in employment. It is well-known that the manufacturing industry has a relatively higher productivity than the service industry. As inter-industry differences in labor productivities increase, labor moves to the service industry for the adjustment of a relative price. Also because the ICT manufacturing sector, which shows relatively low effectiveness in creating employment, grew sharply during the 1990’s, the de-industrialization effect in production did not appear. Recent studies regarding the ICT industry have focused on growth and effectiveness in the industry. Hong et al.(2003) state that growth of the ICT industry during the 1990’s is based on the concentration of capital and labor. They also identify a sharp increase of inter-industry differences in labor productivities between ICT and Non-ICT. K


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Title Determinants of change of the industrial structure
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Sub Title

The Korean case

Material Type Reports
Author(English)

Kim, Jin Woong

Publisher

[Seoul]:Korea Institute for Industrial Economics & Trade

Date 2008
Journal Title; Vol./Issue KIET Industrial Economic Review:vol. 13(no. 2)
Pages 12
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Industry and Technology < General
Holding KIET; KDI School

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