Variations in the Technical Efficiency of Korean Manufacturing Establishments under Two Distinctive Industrial Policies

Mi-Kyung Pai Kim
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Mi-Kyung Pai Kim: University of Southern California

Korean Economic Review, 2002, vol. 18, 25-42

Abstract: This paper investigates the effects of two distinctive government industrial policies of Korea, the "GM"(Governed Market) in the pre-1980 and the "SM" (Simulated Free Market) in the post-1980, on RTE (Relative Technical Efficiency) of the two different groups, the "favored" and the "less favored." The main contribution of this study is the use of micro-level establishment data to analyze the technical efficiency of Non-HCI (Non-Heavy machinery and Chemical Industries) and HCI (Heavy machinery and Chemical Industries) of Korea both in 1978 and 1989. Results indicate that the production frontier of individual industry in 1978 is found to be higher than that in 1989. Also the LEs' (Large Establishments') share and mean RTE of each industry in the sample are concurrently decreased and the distribution of RTE goes to normal distribution as the government converted its industrial policy form the GM to the SM.

Keywords: East Asian success; governed market; simulated market; HCI; production frontier; technical efficiency (search for similar items in EconPapers)
JEL-codes: L1 (search for similar items in EconPapers)
Date: 2002
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