Catching-Up, Crisis and Industrial Upgrading. Evolutionary Aspects of Technological Learning in Korea's Electronics Industry

80 Pages Posted: 16 Mar 2016

See all articles by Dieter Ernst

Dieter Ernst

East-West Center; Centre for International Governance Innovation (CIGI)

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Date Written: August 1998

Abstract

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.

Keywords: Industrialization, industrial upgrading, industrial policies, electronis industry, financialo crisis, Korea

JEL Classification: O14, O25, O38, O53

Suggested Citation

Ernst, Dieter, Catching-Up, Crisis and Industrial Upgrading. Evolutionary Aspects of Technological Learning in Korea's Electronics Industry (August 1998). Asia Pacific Journal of Management, Vol. 15, 1998. Available at SSRN: https://ssrn.com/abstract=2748389

Dieter Ernst (Contact Author)

East-West Center ( email )

1601 East-West Road
Honolulu, HI 96848-1601
United States

Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2
Canada

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