Countries that pursued an import substitution strategy saw slower economic growth than those with an outward-looking trade policy. Import substitution led to inefficient domestic industries protected behind trade barriers, worsening balance of payments, and inhibited growth of linkages between industries. In contrast, countries like South Korea that emphasized export promotion through strategic industry protection and alliances between government and business saw rapid economic development, transforming from poverty to high income in a generation through competitive manufactured exports.
China’s Economic Miracle Under A Macro Economic Viewhong_nona
This is my MBA Business Economic project addressing China’s robust economic growth from a top-10 global economy to the top 3-global economy in 10 years in-row.
The ongoing tradewar between US and China is reaching alarming proportions and has to be seen as a war for international supremacy in Technology and Power
A systematic approach to the 'Trade War' from accusation to events and consequences. I've kept it relatively simple as the presentation was meant for undergrad students.
China’s Economic Miracle Under A Macro Economic Viewhong_nona
This is my MBA Business Economic project addressing China’s robust economic growth from a top-10 global economy to the top 3-global economy in 10 years in-row.
The ongoing tradewar between US and China is reaching alarming proportions and has to be seen as a war for international supremacy in Technology and Power
A systematic approach to the 'Trade War' from accusation to events and consequences. I've kept it relatively simple as the presentation was meant for undergrad students.
| Foreign Direct Investment | Foreign Direct Investment and Pakistan | Featur...Ahmad Hassan
introduction to foreign direct investment, definition and forms of foreign direct investment, features of foreign direct investment policies-Pakistan, investment policies of Pakistan, challenges to foreign direct investment in Pakistan, no go areas for foreign direct investment in Pakistan
Understanding the US-China Trade Relationship Peachy Essay
The US-China Business Council (USCBC) is pleased to have commissioned this study by Oxford Economics on the overall impact of China on the US economy.
During last year’s election campaign, the negative impact of trade with China, such as estimates of jobs lost, received considerable attention. In most cases, the presented data fails to provide a balanced assessment that incorporates the positive effect of the commercial relationship with China. Presenting only the negative impact and ignoring the jobs created, lower inflation, and other benefits of trade with China can lead to policies based on incomplete or misleading information.
The Brief and informative presentation about Pakistan Economic Issue and its solution
so The audience can easily understood to this presentation and can easily take the point of view of pakistan economy and the problems and their solutions
and also the Eras are included from sense the Independence of pakistan
A good slide on export vs import it will help you more to understand about export vs import. just look at this slide and you automatically see how worthy this slides are . Thank you
| Foreign Direct Investment | Foreign Direct Investment and Pakistan | Featur...Ahmad Hassan
introduction to foreign direct investment, definition and forms of foreign direct investment, features of foreign direct investment policies-Pakistan, investment policies of Pakistan, challenges to foreign direct investment in Pakistan, no go areas for foreign direct investment in Pakistan
Understanding the US-China Trade Relationship Peachy Essay
The US-China Business Council (USCBC) is pleased to have commissioned this study by Oxford Economics on the overall impact of China on the US economy.
During last year’s election campaign, the negative impact of trade with China, such as estimates of jobs lost, received considerable attention. In most cases, the presented data fails to provide a balanced assessment that incorporates the positive effect of the commercial relationship with China. Presenting only the negative impact and ignoring the jobs created, lower inflation, and other benefits of trade with China can lead to policies based on incomplete or misleading information.
The Brief and informative presentation about Pakistan Economic Issue and its solution
so The audience can easily understood to this presentation and can easily take the point of view of pakistan economy and the problems and their solutions
and also the Eras are included from sense the Independence of pakistan
A good slide on export vs import it will help you more to understand about export vs import. just look at this slide and you automatically see how worthy this slides are . Thank you
Import Substitution in India: Issues, Challenges and PromotionAakriti Agarwal
Explains the concept of Import Substitution, looks into the top imports of India, namely- Oil, Gold, Electronics and Machinery and tries to suggest methods of import substitution for the same.
IV Международный Форум дноуглубительных компаний
презентация к докладу
«Рынок дноуглубительных работ в морских портах РФ.
Проекты, включающие дноуглубление.
Строительство угольного порта в бухте Мучке»
This class was for a paper I wrote for my International Trade Law class. My conclusions on the dispute, as far as I am aware, have still not been resolved by the WTO.
During Export/Import Practice Management the following topics were covered.
Categories of International Documents; US Customs Import Document Requirements; Proforma and Commercial Invoices; Export Documents; AESDirect and Q&A.
The success of export promotions can be judged from the growth of exports and the dynamism of the export sector. An effective export promotion should compensate for the disadvantages of the national exporters and should make the export business profitable enough to lure entrepreneurs to this sector.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc
Chapter 1 How do you define emerging markets What are some of t.docxtidwellveronique
Chapter 1
How do you define emerging markets? What are some of the common characteristics?
Emerging markets are those markets in a transition phase from developing to developed markets due to rapid growth and industrialization. Hence, markets which have (a) started an economic reform process aimed at alleviating problems, for example, of poverty, poor infrastructure and overpopulation; (b) achieved a steady growth in gross national product (GNP) per capita; (c) increased integration in the global economy; may truly be called emerging economies.
In defining emerging markets, large populations, rapid growth in GDP as well as increased contribution to world trade can be identified. Increased contribution to the world economy can be observed in increased exports, imports, inward and outward foreign investments. Such markets are often associated by rapidly growing populations and younger populations.
Such markets are also identified by progressive economic reforms and expectations of accelerated economic expansion. High growth rates and industrialization also lead to urbanization in such markets. In parallel, income levels are often increasing rapidly.
Even though emerging markets are very different from each other in terms of culture, political and economic characteristics, market structures and demographic structures, some general trends can be identified in order to understand the rise of such markets, as well as opportunities and challenges presented by these markets.
What are some of the reasons for increased importance of emerging markets in the global economy?
Traditionally, the emerging market environment was characterized by protected domestic firms, high tariffs, weak institutions, conglomerates and business groups, and a turbulent climate. Towards the end of the twentieth century, emerging markets started to go through structural reforms in an attempt to create stability and growth. Due to such reforms, many emerging markets have stabilized their economies and started growing rapidly. As emerging markets adopt a relatively open approach to world trade, they are able to integrate with the global economy.
Increased contribution of emerging markets to world trade is one of the reasons which has led to the emphasis of emerging markets in the global economy. Many of such markets have become major exporters and the interdependency among developed and emerging markets have increased.
Liberalization has also augmented to the focus on emerging markets in the global economy as the markets present major opportunities for foreign investment. Economic growth rates of emerging markets are higher than those of developed economies. Hence, such markets often present better prospects in terms of planning future investments. In parallel, policy reforms in these markets leading to improved fiscal and monetary policies, as well as stronger financial markets, have reduced volatility significantly. Hence, the rise of such countries as potential ...
MGMT 4710
INTERNATIONAL BUSINESS
CHAPTER 1. GLOBALIZATION
I. INTRODUCTION
As individuals and organizations have expanded their operations across wider geographical areas, global events and competition are affecting almost all firms—large or small. Currently, over 20 percent of world production is sold outside of its country of origin, restrictions on imports continue to decline, the foreign ownership of assets as a percent of world production continues to increase, and world trade continues to grow more rapidly than world production.
Globalization refers to the broadening set of interdependent relationships among people from different nations. International business involves all commercial transactions, including sales, investments, and transportation—private and governmental—between parties of two or more countries.
II. THE FORCES DRIVING GLOBALIZATION
Several factors contribute to the trend toward increased globalization:
1. Increase in and Expansion of Technology:
Vast improvements in transportation and communications technology—including the Internet—have significantly increased the effectiveness and efficiency of international business operations.
2. Liberalization of Cross-Border Trade and Resource Movement
Over time, most governments have been lowering restrictions on trade and foreign investments. It is believed that international competition makes domestic producers more efficient, and gives citizens greater consumer choices and lower prices.
3. Development of Services That Support International Business
Services provided by national and multinational institutions greatly facilitate the conduct and reduce the risks of doing business internationally.
4. Growing Consumer Pressures
Because of innovations in transportation and communications technology, consumers are well-informed about and often able to access foreign products. This has forced competitors to respond to the needs of consumers from all over the world
5.
Increased Global Competition
The pressures of increased foreign competition often persuade firms to expand internationally in order to gain access to foreign opportunities and to improve their overall operational flexibility and competitiveness.
6. Changing Political Situations
The transformation of the political and economic policies of Eastern Europe and East Asia (China and Vietnam in particular) has led to vast increases in trade between these countries and the rest of the world.
7. Expanded Cross-National Cooperation
Governments have increasingly entered into cross-national treaties and agreements in order to gain reciprocal advantages for their own firms, to jointly address problems that one country cannot solve alone, and to deal with areas of concern that lie outside the territory of all countries.
III.
PROBLEMS WITH GLOBALIZATION
Anti-globalization forces have protested both peacefully and violently as they press for legislation and other means to stop or slow the globalization process. The issu ...
A wide-ranging presentation assessing the impacts of trade liberalisation on national economies and the international trend towards greater trade in services.
The economic success of the Asian Tigers resulted from their own efforts. Each country largely followed the Japanese model of export-led development: they began with exports of the cheapest products, educated their citizens so that they would be knowledgeable workers, and then increased the value of the products that were being exported. Today, South Korea, for instance, is the home of technology giants Samsung and LG, both of which have benefited immensely from government policies that promoted education. Singapore, meanwhile, has become a global trading and banking hub-another example of expertise in a high-value industry.
THE IMPACT OF TRADE LIBERALIZATION ON ECONOMIC GROWTH; THE CASE OF SUB-SAHARA...AkashSharma618775
The main aim of this research is to explore the effect of trade liberalization on economic growth in subSaharan Africa by analyzing certain macro-economic indicators using Ordinary Least Squares approach to
estimate regression equations. Many developing countries have substantially liberalized their trade regime over the
past three decades, either unilaterally or as part of multilateral initiatives. Nevertheless, trade barriers remain
high in many developing countries. One of the concerns that attributes to the reluctance of many of these countries
to liberalize their trade regime is the possible worsening of the trade balance.
This research paper is meant to give a recommendation on which macro-economic indicators sub-Saharan African
countries should pay particular attention to, implementing the necessary policies to ensure its effectiveness thereby
ensuring a step-up in those aspects of the economy in order to promote development. It considers 46 different
countries with different economic policies in sub-Saharan Africa for a 14-year period. Most papers considering
sub-Saharan African region consider a selected few countries based on certain economic reasons of their choice,
and those who consider most countries in the region have different macroeconomic indicators they employ for their
modeling. This paper considers if not all, almost all sub-Saharan African countries regardless of their economic
status.
Should local (and infant) industries be protected? Are tariffs imposed on importation of certain goods effective in enabling local production of the same goods?
6 Business–Government Trade Relations
Learning Objectives
After studying this chapter, you should be able to
1Describe the political, economic, and cultural motives behind governmental intervention in trade.
2List and explain the methods governments use to promote international trade.
3List and explain the methods governments use to restrict international trade.
4Discuss the importance of the World Trade Organization in promoting free trade.
A LOOKBACK
Chapter 5 explored theories that have been developed to explain the pattern that international trade should take. We examined the important concept of comparative advantage and the conceptual basis for how international trade benefits nations.
A LOOKAT THIS CHAPTER
This chapter discusses the active role of national governments in international trade. We examine the motives for government intervention and the tools that nations use to accomplish their goals. We then explore the global trading system and show how it promotes free trade.
A LOOKAHEAD
Chapter 7 continues our discussion of the international business environment. We explore recent patterns of foreign direct investment, theories that try to explain why it occurs, and the role of governments in influencing investment flows.
Lord of the Media
Hollywood, California — Time Warner (www.timewarner.com) is the world’s leading media and entertainment company and earns around $46 billion annually. Its businesses include television networks (HBO, Turner Broadcasting), publishing (Time, Sports Illustrated), and film entertainment (New Line Cinema, Warner Bros.). As Time Warner marches across the globe, people in almost every nation on the planet view its media creations.
New Line Cinema’s The Lord of the Rings trilogy (based on the tale by J.R.R. Tolkien) is the most successful film franchise in history. The final installment in the trilogy, The Lord of the Rings: The Return of the King, earned more than $1 billion at the worldwide box office. The entire trilogy earned nearly $3 billion worldwide and won 17 Academy Awards. New Line is now producing the prequel to The Lord of the Rings series, The Hobbit.
Source: David James/Warner Bros/Courtesy of Warner Bros./Bureau L.A. Co./CORBIS-NY.
Warner Bros.’s ongoing Harry Potter films, based on the novels of former British schoolteacher J.K. Rowling, have been magically successful. Kids worldwide snatched up Harry Potter books in every major language and now pour into cinemas to watch young Harry on the silver screen. Warner Bros. also hit it big in 2008 with the Batman film, The Dark Knight—one of the highest-grossing films ever. The company also produces mini-movies and games exclusively for its Web site.
Yet Time Warner must tread carefully as it expands its reach. Some governments fear that their own nations’ writers, actors, directors, and producers will be drowned out by big-budget Hollywood productions such as The Lord of the Rings and Harry Potter. Others fear the replacement of their tradition.
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
How Does CRISIL Evaluate Lenders in India for Credit RatingsShaheen Kumar
CRISIL evaluates lenders in India by analyzing financial performance, loan portfolio quality, risk management practices, capital adequacy, market position, and adherence to regulatory requirements. This comprehensive assessment ensures a thorough evaluation of creditworthiness and financial strength. Each criterion is meticulously examined to provide credible and reliable ratings.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
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how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
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I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
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#pinetwork
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
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Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Import Substitution Vs Export Orientation; Case Study of Korean Economy
1. It is widely accepted that countries with an outward-oriented outlook have grown faster
than those with an import substituting orientation. Why? To give light on this matter, let us
first provide a brief historical background of the shift, then after present the outcomes of import
substituting orientation that would make it inferior compared to an outward-oriented approach in
growing the economies, followed by the presentation of findings of why an outward-oriented
approach have gone farther than of an inward-orientation. Lastly, as a conclusion we will discuss
a case study on the success of South Korea.
Historical Context. For several decades after the World War II, numerous countries such as in
Latin America, Africa and Asia actively interfered with trading internationally. Their trade policies
at that time were in the context of Import Substitution, that is, they implement trade prohibitions,
strict quotas and very high tariffs on imports. These measures were intended to “protect” the local
industries so that they could defy comparative advantage and substitute domestic goods for
formerly imported goods. Import Substitution policies were largely based on the notion that
economic growth could be accelerated by actively directing economic activity away from the
traditional agricultural and resource sectors of the economy and towards manufacturing. The
broad range of protectionist tariffs, quotas, and other prohibitions on import that were part of this
policy were not a form of strategic protection. The sectoral model of the economy shows that
strategically chosen protection can be beneficial if the right industries are promoted. But the broad
protection under IS policies usually protected all industries indiscriminately, whether they
generated technology externalities or had the chance of achieving competitive cost (H. Van Den
Berg, 2001).
Consequences of an Inward-Looking. Todaro and Smith (2008) cited five negative outcomes
(making IS strategy of industrialization largely unsuccessful). First, secure behind protected tariffs
walls and immune from competitive pressures, many IS industries remains inefficient and costly
to operate. Second, the main beneficiaries of the import substitution process have been the
foreign firms that were able to locate behind the tariffs walls and take advantage of liberal tax and
investment incentives. After deducting interest, profits, and royalty and management fees, most
of which are remitted abroad, the little that may be left over usually amasses to the wealthy local
industrialists with whom foreign manufacturers cooperate and who provide their political and
economic cover. Third, most import substitution has been made possible by the heavy and often
government-subsidized importation of capital good s and intermediate products by foreign and
domestic companies from which results to worsening of the situation in the balance of payments.
Fourth, many import substitution strategies exhibited detrimental effects on traditional primary-product
exports. Exchanged rates have been artificially overvalued. This has had the effect of
raising the price of exports and lowering the price of imports in terms of the local economy. Later
on it would encourage capital-intensive production methods still further (because the price of
imported capital goods is artificially lowered) and to penalize the traditional primary-product
exports by artificially raising the price of exports in terms of foreign currencies. This effect would
have another effect such as making the local agriculture less competitive in the world markets.
Lastly, import substitution, which may have been conceived with the idea of stimulating the infant
industry growth and self-sustained industrialization by creating forward and backward linkages
with the rest of the economy, has often inhibited industrialization. Many infant industries never
grow up, content to hide behind protective barriers and governments reluctant to force them to be
more competitive by lowering the tariffs. Governments of developing countries themselves often
operate the protected industries as a state-owned enterprises. Moreover, by increasing the costs
of inputs to potentially forward-linked industries and by purchasing their own inputs from overseas
sources of supply rather than through backward linkages to domestic suppliers, inefficient import
substituting firms may in fact block the hope for the process of independent integrated
industrialization.
2. Van Den Berg (2001) also suggest that industries of import substituting economies often failed in
adopting new and cheaper technology (when they were available). In effect, technological
progress slows down. The likely cause of the slowing down can be explained by Schumpeterian
model of endogenous technological progress. He added that for the process of creative
destruction to work, there must be destruction as well as creation, if an initial creation it not
followed by a second creation, which implies the destruction of first creation’s advantage, then
economic growth stops.
Impetus of an Outward-Looking. Export promotion strategies have been preferred than import
substitution approach because it has been observed internationally (particularly the World Bank)
as effective in growth and development (compared to the other approach) in the evidence of the
success of some Asian countries like South Korea and Taiwan. In the words of Paul Streeten,
“outward-looking development policies encourages not only free trade but also free movement of
capitals, workers, enterprises and students,…the multinational enterprises, and an open system
of communications”.
As cited by Manu (2009) on the Journal of International Business and Economics, the goal of
expanding manufactured exports was given impetus by the "success" stories of such LDCs as
Taiwan, South Korea and Brazil during the 1960s and 1970s.
In recent times, however, growing protection in developed countries has again dampened the
viability of this kind of expansion. This outward-looking strategy of development based on export
promotion is generally considered to be a better one than that of import-substitution thing
(Krueger, 1998).
Case Study: The Economy of South Korea
If one were asked to identify the most successful example
of how international trade and trade policy can transform
an underdeveloped country from a condition of
widespread poverty to one of the high-income status in a
single generation, the answer would undoubtedly be
South Korea. Lacking natural resources, Korea’s greatest
wealth are its hardworking people; its drive to succeed; its
strategic alliances between the government and private
industry in selecting and promoting carefully chosen
exports while judiciously protecting them from competing
imports on a temporary basis. South Korea occupies in
the southern portion of the mountainous peninsula
projecting southeast from China and separating the Sea
of Japan from Yellow Sea. South Korea’s only land border
is with North Korea, formed by the military demarcation
line marking the line of separation between the belligerent
sides at the close of Korean War. With over 47 million
people, South Korea has one of the world’s highest
population density. Over the past 40 years, South Korea’s
economic growth has been spectacular. The nation has advanced from being one of the world’s
poorest in the 1950’s to one of the richest today. In fact, in 1996 it was designated a high income
country by the World Bank and joined the Organization Economic Cooperation and Development
in Paris as an industrialized, aid-giving country. But that was before it became principal victim of
the 1998 Asian Crisis.
3. According to Forbes (2013), the 1998 Asian financial crisis exposed longstanding weaknesses in
South Korea's development model including high debt/equity ratios and massive short-term
foreign borrowing. GDP plunged by 6.9 percent in 1998, and then recovered by 9 percent in 1999-
2000. Korea adopted numerous economic reforms following the crisis, including greater openness
to foreign investment and imports. Growth moderated to about 4 percent annually between 2003
and 2007. Korea's export focused economy was hit hard by the 2008 global economic downturn,
but quickly rebounded in subsequent years, reaching 6.3 percent growth in 2010. The US-South
Korea Free Trade Agreement was ratified by both governments in 2011 and went into effect in
March 2012. Throughout 2012 the economy experienced sluggish growth because of market
slowdowns in the United States, China, and the Eurozone.
The nation’s successful industrial growth began in the early 1960s, when the government
instituted sweeping economic reforms emphasizing exports and labour-intensive light industries.
The government also carried out currency reform, strengthen financial institutions, and introduced
flexible economic planning. South Korea’s rapid and sustained development can be ascribed to
a combination of social and economic factors: the high level of industriousness and literacy among
the people, the introduction in the early 1960s of economic reforms aimed at expending exports
and labour-intensive industries, the gradual removal of import barriers, the extreme flexibility of
economic management, the close cooperation between government and private industry, and
the autonomy of the banking system and the development of an efficient financial market. But the
close cooperation between government and export industries during the period of rapid catch-up
with the West is perhaps the most important key to understanding success of its outward-looking
industrialization strategy.
According to Smith (2003), the case of South Korea suggests that it is a combination of industrial
policies addressed to specific market failures, and consistent with underlying market forces (as
well as the local political economy) that promotes industrial development. Without proper attention
to incentives (for both market and rent-seeking activities), these same industrial policies can prove
counterproductive. Countries that cannot find the political will to use protection as a highly
selective and strictly temporary instrument of industrial policy in cases where large, identified
market failures can be shown to exist, are probably better off abandoning this instrument
altogether; the case of Bolivia is probably a good example of this. Even prior to the financial crisis,
Korea's now democratic government is making a series of adjustments designed to make its
market economy function in a more mature way. In the past, the government encouraged giant
conglomerates, or Chaebol, to expand and enter new markets as a way of achieving economies
of scale and scope, to facilitate exporting, and to facilitate its control over the economy by keeping
the number of companies it had to stay in close contact with small. Now that the Korean economy
is established, the Chaebol are seen as liabilities to further growth. They are also seen as political
liabilities, or as companies that unfairly received government advantages in the past from which
other companies did not benefit. Antitrust regulations are now being enacted and enforced; this
will probably make the Korean economy much more competitive in the future. As the Korean
economy approaches maturity, government's role in the productive sector continues to recede.
But the lesson for developing countries that would like to emulate South Korea's success is that
until the world technology frontier is approached, government does have an important role, even
in the productive sector, until domestically-based private industry can establish itself.
By: Justine C. Banta
Course: Econ 312 Development Economics
Topics: Industrialization & Trade
4. References
(2013). Retrieved from Forbes: http://www.forbes.com/places/south-korea/
Krueger. (1974). Foreign Trade Regimes and Economic Development. Turkey: Columbia
University Press New York.
Manu, F. A. (2009, January 1). FPO IP Research & Communities. Retrieved from Journal of
International Business Economics: http://www.freepatentsonline.com/article/Journal-
International-Business-Economics/208535025.html
Smith, S. C. (2003). Case Studies in Economic Development. Retrieved from
http://wps.aw.com/wps/media/objects/277/284582/todarocasestudies.pdf
Todaro, M. P., & Smith , S. C. (2008). Economic Development 10th Edition. Boston, United States
of America: Pearson Education Incorporated.
Todaro, M. P., & Smith, S. C. (2004). Economic Development 8th Edition. Singapore: Pearson
Education South Asia Pte. Ltd.
Todaro, M. P., & Smith, S. C. (2012). Economic Development 11th Edition. Boston, United States
of America: Pearson Education Incorporated.
Van Den Berg, H. (2001). Economic Growth and Development. New York, United States of
America: McGraw-Hill /Irwin.