Could Imports be Beneficial for Economic Growth? Some Evidence from Republic of Korea

Sangho Kim (), Hyunjoon Lim and Donghyun Park
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Sangho Kim: Honam University
Hyunjoon Lim: University of Rochester

No 103, ADB Economics Working Paper Series from Asian Development Bank

Abstract: The Republic of Korea is widely seen as a classical example of East Asia's export-driven economic growth. The focus in the literature on exports in the economy's growth has led to an almost complete neglect of the role of imports. This study investigates the relationship between exports, imports, and economic growth using quarterly data from 1980 to 2003. Results indicate that imports have a significant positive effect on productivity growth but exports do not. Furthermore, the evidence reveals that the productivity-enhancing impact of imports is due to competitive pressures arising from consumer good imports and technological transfers embodied in capital good imports from developed countries. Most of the study's results still hold using gross domestic product growth rather than productivity growth as the measure of economic growth. The evidence implies that under certain circumstances, import liberalization can make a positive and significant contribution to growth and development.

Keywords: economic growth; imports; productivity growth; Republic of Korea; trade (search for similar items in EconPapers)
JEL-codes: F14 F41 O47 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2007-10-01
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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0103

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