Manufacturing Revolutions: Industrial Policy and Industrialization in South Korea

Arbeitspapier

I study the impact of industrial policy on industrial development by considering a canonical intervention. Following a political crisis, South Korea dramatically altered its development strategy with a sector-specific industrial policy: the Heavy and Chemical Industry (HCI) drive, 1973-1979. With newly assembled data, I use the sharp introduction and withdrawal of industrial policies to study the impacts of industrial policy---during and after the intervention period. I show (1) HCI promoted the expansion and dynamic comparative advantage of directly targeted industries. (2) Using variation in exposure to policies through the input-output network, I show HCI indirectly benefited downstream users of targeted intermediates. (3) I find direct and indirect benefits of HCI persisted even after the end of HCI, following the 1979 assassination of the president. These effects include the eventual development of directly targeted exporters and their downstream counterparts. Together, my findings suggest that the temporary drive shifted Korean manufacturing into more advanced markets and created durable industrial change. These findings clarify lessons drawn from South Korea and the East Asian growth miracle.

Object Details

• Language: Englisch

Classification and Topics

• Classification: Wirtschaft ; Industrialization; Manufacturing and Service Industries; Choice of Technology ; Industrial Policy ; Industrial Policy ; Industrialization; Manufacturing and Service Industries; Choice of Technology
• Subject: industrial policy ; industrial development ; East Asian miracle ; HCI ; Heavy-Chemical Industry ; South Korea ; spillovers

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lane, Nathan
• Event: Veröffentlichung
• (who): ZBW - Leibniz Information Centre for Economics
• (where): Kiel, Hamburg
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/263135
• Last update: 10.03.2025, 11:42 AM CET