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Abstract:
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This paper addresses a puzzle: How is it possible that a country that has established
a broad, export-oriented industrial base at record speed, remains vulnerable to the
vicissitudes of international finance and currency markets? I argue that the Korean
model that was tremendously successful for catching-up, has now reached its limits.
The analysis centers on the co-evolution of industry structure and firm behavior. The
focus is on the role of technological learning for the development of the electronics
industry, a main carrier of Korea´s successful late industrialization. It is shown that
a heavy reliance on credit and an extremely unbalanced industry structure have
given rise to a narrow knowledge base and a sticky pattern of specialization.
Catching-up has focused on capacity and international market share expansion for
homogeneous, mass-produced products; very little upgrading has occurred into
higher-end and rapidly growing market segments for differentiated products and
services. Such truncated upgrading is one important reason for Korea´s
vulnerability to the financial and currency crisis. |
This work is licensed under a Creative Commons License.
