Long-Term Shifts in Korean Manufacturing and Plant-Level Productivity Dynamics

Yoonsoo Lee (ylee@sogang.ac.kr)

No 9279, Policy Research Working Paper Series from The World Bank

Abstract: The Korean manufacturing sector has undergone active structural transformation in the past few decades. In particular, the composition of core manufacturing products has changed over time. In the 1970s, textiles, which are used to produce fabric, clothes, apparel, and shoes, were the main product. Over time, the value added shares have shifted toward electronics, ships, and cars. By analyzing plant-level microdata, this paper documents the patterns of entry, exit, job creation and destruction, and the growth of young plants during the industrial shift. This industrial shift involved active job reallocations, as well as the entry and exit of plants. The paper quantifies the extent to which such plant-level dynamics explain aggregate productivity growth. The findings show that within-plant productivity growth, which includes the effects of fast growth of young plants as well as robust growth of large continuing plants, played an important role in the productivity growth of the Korean manufacturing sector. The contribution of reallocations between continuing plants was relatively small. Moreover, productivity growth of an industry accompanied an increase of productivity dispersion, a measure commonly interpreted as the degree of misallocation.

Keywords: Food&Beverage Industry; General Manufacturing; Textiles; Apparel&Leather Industry; Pulp&Paper Industry; Common Carriers Industry; Construction Industry; Business Cycles and Stabilization Policies; Plastics&Rubber Industry; Transport Services; Labor Markets (search for similar items in EconPapers)
Date: 2020-06-15
New Economics Papers: this item is included in nep-eff and nep-tid
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Citations: View citations in EconPapers (1)

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