Taegi Kim

Productivity growth in Korea: efficiency improvement or technical progress?

This paper shows that the productivity gains in Korean manufacturing are mostly from efficiency improvement rather than from technical progress. These findings are contrary to those of previous sectoral studies of Korean and Taiwanese manufacturing, but are consistent with those of cross-country studies. Regression results show that both domestic and foreign R&D played an important role in increasing efficiency and technical progress in Korean manufacturing. However, domestic R&D has more effect on technical progress, while foreign R&D has played a relatively stronger role in efficiency improvement.

EFFECTS OF PATENTS ON PRODUCTIVITY GROWTH IN KOREAN MANUFACTURING: A PANEL DATA ANALYSIS*

We analyse the contributions of patents to total factor productivity (TFP) performance in Korean manufacturing industries during the period 1981-1999. This paper treats potential autocorrelation problems seriously and uses recent panel cointegration approaches to investigate the robustness of the patent-TFP relationship. The results show that both domestic and foreign-resident patent applications have significant positive effects on productivity and that foreign-resident patent applications have a larger effect than domestic patents in improving TFP in Korean manufacturing. We also find evidence of knowledge spillovers among industries, in that the patent applications of other industries increase TFP in any single industry.

Product Quality, Preference Diversity and Intra‐Industry Trade

This study focuses on the impact of preference diversity and relative country size on intra-industry trade (IIT) in an industry with a vertically differentiated product. By adopting a two-stage game model, we find that the IIT share is higher between countries with a similar preference for quality and that the impact of country size on the IIT index is asymmetric depending on the relative size of the exports and imports of the country. The results of the model can be empirically tested, since preference diversity and country size are related to per capita income and population, respectively.

Intra-Industry Trade: The Korean Experience

The purpose of this paper is to investigate the structure and determinants of intra- industry trade (IIT) in Korea. The results conform to what may be expected under the theory of IIT. In particular, it shows that as capital stock increased more rapidly than labor, Koreas IIT shifted towards more capital intensive sectors. It also supports the theoretical proposition that the determinants of IIT for final goods are not different from those for intermediate goods. [F12]

Investment and adjustment costs of Korean firms in view of Tobin’s q

ABSTRACT This paper investigates investment decisions of Korean firms in view of Tobin’s q, and examines whether the adjustment costs of investment in group firms are lower than those in independent firms. We use firm-level data for 1,106 Korean manufacturing firms over the period 1982 to 2015. The results are as follows. First, group firms are much larger than independent firms, and investment rates are higher in group firms than in independent firms. Second, Tobin’s q is a significant determinant of investment, and the adjustment costs of investment are smaller in group firms than in independent firms. Third, the adjustment-cost advantage of group firms is greater before the financial crisis of 1997. Fourth, a firm’s cash holdings and foreign ownership contribute to increasing investment. This study suggests that group firms invest more than independent firms due to lower adjustment costs, and consequently contribute to economic growth through investment expansion.

The Impacts of Economic Reforms on Efficiency Improvement and Technological Progress in Indian Manufacturing

This paper applied the Malmquist productivity index in order to estimate total factor productivity growth and its components (efficiency change and technological progress) in Indian manufacturing during the pre- and post-reform periods. The results illustrate that the economic reforms have not exerted positive effects on productivity growth in Indian manufacturing. However, the impacts of economic reforms differ between sectors and between components of total factor productivity. First, after reform, the productivity of heavy industries increased, whereas the productivity of light industries decreased. Second, reform improves both the efficiency and the technological progress in the heavy industries, but failed to improve efficiency in light industries. The results of this study suggest that specific policies should be implemented in order to improve efficiency as well as technical progress, thus ultimately facilitating long-run productivity growth.

Measuring the welfare effects of intellectual property rights changes on the Korean pharmaceutical industry: the case of Korea–US Free Trade Agreement

This paper shows how to measure the welfare effects of intellectual property rights (IPR) changes under the Korea–US Free Trade Agreement (FTA) on the Korean economy. After the FTA, patent lifetimes are expected to be extended. During such extension periods, Korean generic drug makers will not be able to sell their drugs, and consumers will have to pay more because of higher prices. The new concepts of effective patent term and price-change mechanism were employed, and patent data for the Korean pharmaceutical industry were used to estimate the parameters needed to measure the welfare effects. The empirical results indicate that the welfare effect will be much smaller than suggested by previous studies. These methods to evaluate the welfare effects can be applied to the cases of other recent FTAs and other kinds of IPR negotiations in international economics.