TY - JOUR AU - Feenstra, Robert C AU - Madani, Dorsati AU - Yang, Tzu-Han AU - Liang, Chi-Yuan TI - Testing Endogenous Growth in South Korea and Taiwan JF - National Bureau of Economic Research Working Paper Series VL - No. 6028 PY - 1997 Y2 - May 1997 DO - 10.3386/w6028 UR - http://www.nber.org/papers/w6028 L1 - http://www.nber.org/papers/w6028.pdf N1 - Author contact info: Robert C. Feenstra Department of Economics University of California, Davis One Shields Avenue Davis, CA 95616 Tel: 530/752-7022 Fax: 530/752-9382 E-Mail: rcfeenstra@ucdavis.edu AB - We evaluate the endogenous growth hypothesis using sectoral data for South Korea and Taiwan. Our empirical work relies on a direct measure of the variety of products from each sector which can serve as intermediate inputs or as final goods. We test whether changes in the variety of these inputs, for Taiwan relative to Korea, are correlated with the growth in total factor productivity (TFP) in each sector, again measured in Taiwan relative to Korea. We find that changes in relative product variety (entered as either a lag or a lead) have a positive and significant effect on TFP in eight of the sixteen sectors. Seven out of these eight sectors are what we classify as secondary industries, in that they rely on differentiated manufactured inputs, and therefore seem to fit the idea of endogenous growth. Among the primary industries that rely more heavily on natural resources, we find more mixed evidence. ER -