Government Interventions and Productivity Growth in Korean ManufacturingIndustries

Jong-Wha Lee

NBER Working Paper No. 5060
Issued in March 1995
NBER Program(s):The Economic Fluctuations and Growth Program, The International Trade and Investment Program

This paper investigates the impact of government industrial policy and trade protection of the manufacturing sector in Korea. Empirical results are provided, using 4-period panel data for the years 1963-83, for 38 Korean industries in which trade protection reduced growth rates of labor productivity and total factor productivity, while industrial policies, such as tax incentives and subsidized credit, were not correlated with total factor productivity growth in the promoted sectors. The evidence, thus, implies that less government intervention in trade is linked to higher productivity growth.

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Document Object Identifier (DOI): 10.3386/w5060

Published: Published as "Government Interventions and Productivity Growth", JEG, Vol. 1, no. 3 (September 1996): 391-414.

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