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Export intermediation and the structure of industry in Korea and Taiwan

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  • Export intermediation and the structure of industry in Korea and Taiwan
  • Levy, Brian
  • United States Agency for International Development


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Title Export intermediation and the structure of industry in Korea and Taiwan
Similar Titles
Material Type Reports
Author(English)

Levy, Brian

Publisher

[Washington, D.C.]:United States Agency for International Development

Date 1987-09
Series Title; No Other USAID Supported Study, Document
Pages 49
Subject Country South Korea(Asia and Pacific)
Taiwan(Asia and Pacific)
Language English
File Type Link
Subject Economy < General
Economy < Trade
Holding United States Agency for International Development

Abstract

Footwear manufacturers have enjoyed substantial export success in both Korea and Taiwan, but in Korea this success has been characterized by the expansion of a few large firms, while in Taiwan it has meant the proliferation of a great many smaller firms. This paper theorizes that the expansion in the number, rather than size, of footwear firms in Taiwan is due to a parallel expansion in the number of footwear exporters. A general equilibrium model of this parallel expansion is sketched, accompanied by an analysis of the impact of initial conditions in Taiwan and Korea on the development of the footwear industry in each country. Korea, which was relatively more backward than Taiwan, provided incentives to large footwear firms to expand, while Taiwan did not. The study concludes that Korean-type incentives to individual firms carry with them the risk of fueling a political-economic process characterized by a high degree of rent-seeking and accompanying socially unproductive policies. By contrast, incentives to exporters emerges as a means of acclerating industrial expansion without the risk of rent-seeking. (Author abstract, modified)