Interpreting East Asian Growth
DYNAMICS, ECONOMIC GROWTH, AND INTERNATIONAL TRADE, Bjarne Jensen & Kar-yiu Wong, eds., University of Michigan Press, 1997
Posted: 5 Mar 2009 Last revised: 12 Mar 2009
Date Written: 1997
In this paper, we review the econometric studies of East Asian growth by Kim and Lau (1994) as well as Young (1994). Constructing a multi-sectoral model of technological transfer, we affirm the complementarity thesis of Kim and Lau: knowledge capital and physical capital accumulation (as well as trade) are all necessary for sustained, rapid growth a la the Asian NIEs. Trade being strategic to emulation, it is no surprise that a similar performance is observed in both Korea under state guidance and Hong Kong under laissez faire. Extending the analysis to a product cycle framework, we manage to reproduce the persistent technological gap result of Kim and Lau. Since Asian NIEs emulate foreign innovative designs, they are not likely to suffer the Soviet fate of obsolescent product designs.
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