• The Journal of Asian Finance, Economics and Business
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• v.7 no.7
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• pp.251-260
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• 2020

The purpose of this paper is to investigate the impact of total factor productivity (TFP), institutional quality, and interactive variable between them on economic growth in 13 low-middle income countries in Asia for the period 2000-2018. The paper uses the difference Generalized Method of Moments (GMM) to explore the dataset provided by the World Bank. The empirical results show that TFP and the interactive variable positively impact on the economic growth, while the institutional determinants have a negative influence. The negative effect is explained by the weak institutions in these low-middle income countries. The findings of the study suggest two points. First, the government should continue to improve TFP, which is associated with the application of technical advances, technological innovations, improvement of management methods, and skilled workers. Second, far more important, is that the authorities should pay special attention to implement institutional reform and strengthen the governance in the future. The successful experiences from Japan, Korea and Singapore will help other governments in Asian low-middle income countries to build developmental state. Probably, the developmental state actively interfere in the market to promote and realize the development goals. By doing so, these economies might overcome the so-called "middle-income trap".

• Journal of Technology Innovation
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• v.14 no.1
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• pp.147-175
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• 2006

One of the biggest problems of Korean economy is polarization of firms for export and domestic demand and that of conglomerates and SME's achievement. One of the culprits lies weakness of intermediate industry such as machine tool. Since intermediate industry is important path where export performance affects domestic demand and whose actor usually is SMEs with high spill over effect in labor market. Especially, intermediate industry Is vulnerable because of industrial policy biased In backward linkage effect. However if a country fails to develop intermediate industry above some critical point, that country would fall in low-tech equilibrium without growth. In case of benign circle where final goods industry growth leads growth of intermediate industry and again it leads that of final goods industry, it can reach high-tech equilibrium. By contrast, in opposite case where in industrialization latecomer fails to link industries likewise above some critical point that country would fall in low-tech equilibrium without growth. Moreover, for several reasons, machine tool firms of Korea have difficulty in catching up technology above critical point. Firstly. Conglomerate demander neglects their product. Secondly, even after success of development overcoming difficulties they fail to get market share for response of dumping of foreign competitors. And the last one is patent litigation of foreign competitors that incapacitate the technology development. For these, Korean machine tool firms fell in 'middle-income country trap' itself, since they stuck in some extent when they technologically catch up. Consequently, for latecomer country in machine tool industry to leapfrog meaningfully policy support is necessary, Weak intermediate industry does not Induce domestic firms and remained fragile. Therefore, localization, policy should reflect condition of technological catch up more than before, in order to be effective and fruitful. There should be turning point over relationship between conglomerates, major demander of machine tool and SME's, for only with active purchasing of conglomerate Korean machine industry can grow.

• Journal of the Economic Geographical Society of Korea
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• v.17 no.4
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• pp.817-831
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• 2014

In this paper insights from studies on the middle income trap and value chains analyses are combined to investigate one particular industry in one particular region: the sugarcane industry in Northeastern Thailand. Focusing on this region enables an in-depth focus on geographical differentiation of the middle income trap. The empirical outcomes demonstrate that policymakers involved with sugar should look at the particular challenges in Northeastern Thailand: 1. The role of brokers which is unaddressed in the current regulatory environment; 2. A lack of information of the regulatory environment among growers; 3. Distrust between growers and millers; 4. Alack of implementation of R&D efforts; 5 .A lack of support from associations; 6. The labor shortage problem, and 7. No incentives for growers, brokers and millers to improve quality and embark on upgrading. Since agricultural value chains in Southeast Asia often start in relatively poor rural areas it is imperative that policymakers balance the interests of upstream, midstream and downstream actors. Unfortunately, this is rather difficult as midstream actors (millers) and wholesalers are powerful and therefore, are in the best position to defend their interests. Our insights could function as comparative material for similar studies within other Southeast Asian upstream value chains.

• International Area Studies Review
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• v.20 no.2
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• pp.113-140
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• 2016

This paper first extracts the main basis for the Middle-Income Trap(MIT) to apply these grounds to reality of the Chinese economy. And then confirmed crisis factors of China economy. Also discussed then the economic reforms of China in order to not fall into the MIT. After reviewing previous research extracted six factors the results will correspond to comply with the Chinese economy. Those are 'Over-investment', 'excess capacity' 'reduction of TFP continued,' 'disappearance and the aging of the population bonus', 'excessive debt and structural adjustment and financial instability of the company', 'income unequal expansion', 'low financial and information infrastructure accessibility', and 'low transparency index'. China's policy direction to avoid the MIT generally set properly, but proof that implementation process not easy, was appearing everywhere. After all, China economy should be modified now to a reforms of 'government failure' and promotion of function for ongoing restructuring system in the market. Because of the SDR incorporation from 2015, it is inevitable to face major constraints in the external aspects.

• KDI Journal of Economic Policy
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• v.37 no.2
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• pp.1-21
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• 2015

The creation of S&T knowledge and development of S&T- based innovation has spread worldwide from traditionally advanced countries to traditionally developing countries, often under the direction of governments. Korea is an exemplar in this new locus. Korea's burst in Science and Technology during the last three decades has made Korea a substantive player in the global production of S&T knowledge and its application to business. Although Korea still trails the US and other top countries in the quality of research, it has leaped from its 1980s standing as bit player in the knowledge economy to being among the leaders in the early 21st Century. This paper shows that Korea's advance benefited from its active participation in the global market in higher education, in international research collaborations, and its close ties to the U.S. Korea's experience offers lessons for other countries who seek to advance by becoming knowledge economies. Korea proves that a developing country can gain comparative advantage in knowledge production and use; that government policy can stimulate such a development; and that openness to the world of higher education and research is the best way to move forward and overcome the middle income trap.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.1
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• pp.13-24
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• 2022

The main goal of this study is to look at how South Korea can catch up to the rest of the world through policy-driven structural change and manufacturing revolutions. To achieve the objective, this study used annual data on real exports and real GDP from the World Development Indicator WDI of South Korea for the period 1960 to 2019. The study's goal is to use econometrics to detect this policy-driven structural change trend. Multiple nonlinear Granger causality test was used to accomplish this. The findings revealed structural breaks and nonlinearities in the dynamic link between South Korea's real GDP and real exports. Furthermore, results also show evidence of multiple structural breaks in South Korean data. South Korea's economic catch-up was the result of a constant reevaluation of industrial policies, readjustment, and structural change to constantly explore and utilize comparative advantage, realizing economies of scale at the global level, and reallocating and redistribution of resources towards productive sectors with high value-added output, according to econometric analysis. If South Korea would have not done this structural change this miracle to escape the middle-income trap would not have been possible. These findings support the descriptive evidence of structural change in favor of manufacturing revolutions and value addition industry development in South Korea.

• Journal of the Korea Society of Computer and Information
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• v.27 no.9
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• pp.225-234
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• 2022

Innovation is not only one of the factors determining the competitiveness of national regions, but also an engine for economic development, and plays an important role in breaking out of the trap of middle-income countries. This paper constructs a regional innovation index from the perspectives of innovation input, innovation output, and innovation environment, and measures the regional innovation index of 31 provinces, municipalities, and autonomous regions in China from 2006 to 2019 by using principal component analysis and cluster analysis. The results concluded that there are large provincial and municipal differences in China's regional innovation capacities, and the provinces with higher comprehensive levels are mainly concentrated in the southeastern coastal region. Cluster analysis divides the 31 provinces, municipalities, and autonomous regions into five types, and the results find that the respectively developed coastal regions are in the high-level and the high-level regions relying on the advantages of location and national policies.