Productivity Growth and Efficiency Dynamics of Korean Structural Transformation

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dc.creatorJeong, Hyeok
dc.date2020-06-25T14:17:24Z
dc.date2020-06-25T14:17:24Z
dc.date2020-06
dc.date.accessioned2026-07-01T00:36:22Z
dc.descriptionThis paper documents the sources of the Republic of Korea's economic growth, as well as the associated productivity growth and efficiency dynamics during its process of structural transformation from 1970 to 2016. The analysis includes land as a separate production factor to sort out the significant effect of changes in intersectoral land allocation, which makes significant differences in measuring the magnitudes and directions of change in sectoral total factor productivity (TFP). Input-based growth and structural changes contributed to the early take-off stage of growth in the 1970s. However, in the following three decades, the source of growth switched to productivity improvements, mainly engineered by the industry sector. This was the reason behind the country's sustained growth and escape from the "middle-income trap." Furthermore, agricultural TFP growth also made an important contribution to structural transformation by pushing out factors from agriculture to industry. Since 2011, however, when the Korean economy seemed to reach a steady state of constant capital-output ratio, TFP has suddenly stagnated. The wedge analysis suggests that the intersectoral allocation of labor was biased toward agriculture while that of capital and land was biased toward industry, compared to efficient levels. Meanwhile, the inter-temporal wedge analysis suggests that the Korean economy was in an over-investment mode throughout its structural transformation. The analysis also shows that the periods of productivity growth are not always associated with the enhancement of allocative efficiency, while growth-disturbing external macroeconomic shocks, such as joining the WTO and the Asian financial crisis, led to improvements in allocative efficiency.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttp://documents.worldbank.org/curated/en/216711592488286605/Productivity-Growth-and-Efficiency-Dynamics-of-Korean-Structural-Transformation
dc.identifierhttps://hdl.handle.net/10986/33980
dc.identifier10.1596/1813-9450-9285
dc.identifier.urihttp://hdl.handle.net/123456789/407175
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper;No. 9285
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo
dc.rightsWorld Bank
dc.subjectPRODUCTIVITY GROWTH
dc.subjectSTRUCTURAL TRANSFORMATION
dc.subjectTOTAL FACTOR PRODUCTIVITY
dc.subjectSUSTAINABLE DEVELOPMENT
dc.subjectMARGINAL RATE OF SUBSTITUTION
dc.subjectWEDGE ANALYSIS
dc.subjectALLOCATIVE EFFICIENCY
dc.titleProductivity Growth and Efficiency Dynamics of Korean Structural Transformation
dc.typeWorking Paper
dc.typeDocument de travail
dc.typeDocumento de trabajo

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