Manufacturing Revolutions: Industrial Policy and Industrialization in South Korea
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.
Date: 15 February 2022, 17:00 (Tuesday, 5th week, Hilary 2022)
Venue: Nuffield College, New Road OX1 1NF
Venue Details: Large Lecture Room, Nuffield College. Or join online https://zoom.us/j/93089349963?pwd=c2pZQm8vTFkwL0VoVndmUmpSSVcvZz09
Speaker: Nathan Lane (University of Oxford)
Organising department: Department of Economics
Part of: Economic and Social History Seminar
Booking required?: Not required
Audience: Members of the University only
Editor: Emma Heritage