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A micro, econometric investigation of choice of technology (English)

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  • A micro, econometric investigation of choice of technology (English)
  • RHEE, Y.; WESTPHAL, L.
  • World Bank (WB)


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Title A micro, econometric investigation of choice of technology (English)
Similar Titles
Material Type Articles
Author(English)

RHEE, Y.; WESTPHAL, L.

Publisher

World Bank (WB)

Date 1977
Language English
File Type Link
Subject Social Development < Education

Abstract

A microstudy of the determinants of technological choice utilizing sample observations at the man-machine level from operating plants in Korea is presented. The study focuses on the choice between imported and locally made looms for cotton textile weaving in South Korea. During the late 1960s and early 1970s, indigenous looms sold for less than one-third the price of imported looms, yet the latter were purchased in large numbers. Export incentives in combination with cross subsidization between the domestic and export markets would appear to have elicited a larger volume of production of superior fabric varieties than would otherwise have been observed. In turn, the choice by producers of the imported automatic technology is generally associated with the production and export of these varieties. Producers' choices seem to be consistent with net worth maximizing behavior. Particularly important are the policies of credit access on preferential terms and exemption from tariffs coupled with an overvalued exchange rate. Policies encouraging the use of imported technology simultaneously discriminate against domestic textile machinery manufacturers, thus inappropriately retarding the development of the domestic engineering industry. 13 references.