Korea's Economic Growth and Catch-up: Implications for China

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

This study investigates the economic growth and catch-up of Korea over the past half century. Korea's growth experience confirms the prediction of a “conditional convergence” theory. Cross-country regression further suggests that Korea's strong catch-up to the USA is also attributable to its favorable growth factors such as strong investment, lower fertility, greater trade openness, and improvements in human resources and rule of law. However, as Korea catches up to the USA and its steady-state level in per worker output, it will be subject to a growth slowdown unless improvements are made in those growth factors. While manufacturing-oriented and export-oriented development has served Korea's success well, poor productivity performance in the services sector has hampered overall productivity growth. Korea's experience implies that China's potential growth rates are likely to slow in the coming decades due to the convergence effect and with the rebalancing toward a domestic consumption and services-based economy. China needs to upgrade its rule of law, reform state-owned enterprises and improve productivity, particularly in its services sector, to sustain strong growth.

Original languageEnglish
Pages (from-to)71-97
Number of pages27
JournalChina and World Economy
Volume24
Issue number5
DOIs
Publication statusPublished - 2016 Sep 1

Fingerprint

Korea
Catch-up
Economic growth
China
Growth factors
Productivity
Service sector
Rule of law
Workers
Trade openness
Conditional convergence
State-owned enterprises
Cross-country regressions
Human resources
Fertility
Law reform
Manufacturing
Productivity growth
Upgrade
Rebalancing

Keywords

  • China
  • convergence
  • economic growth
  • Korea
  • structural change

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this

Korea's Economic Growth and Catch-up : Implications for China. / Lee, Jong-Wha.

In: China and World Economy, Vol. 24, No. 5, 01.09.2016, p. 71-97.

Research output: Contribution to journalArticle

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