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Korea and the Bics (Brazil, India and China) : Catching Up Experiences / V. Chandra
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications")- Format:
- Book
- Government document
- Author/Creator:
- Chandra, V.
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Antitrust.
- Debt.
- Drivers.
- E-Business.
- Economic growth.
- Economic theory.
- Economic Theory and Research.
- Education.
- Employment.
- Human capital.
- Income.
- Industrialization.
- Industry.
- Innovation.
- Innovations.
- Knowledge for Development.
- Labor force.
- Labor Policies.
- Labor productivity.
- Market economies.
- Private Sector Development.
- Productivity.
- Productivity growth.
- Property rights.
- Rents.
- Social Protections and Labor.
- Trade liberalization.
- Trade reforms.
- Water and Industry.
- Water Resources.
- Local Subjects:
- Antitrust.
- Debt.
- Drivers.
- E-Business.
- Economic growth.
- Economic theory.
- Economic Theory and Research.
- Education.
- Employment.
- Human capital.
- Income.
- Industrialization.
- Industry.
- Innovation.
- Innovations.
- Knowledge for Development.
- Labor force.
- Labor Policies.
- Labor productivity.
- Market economies.
- Private Sector Development.
- Productivity.
- Productivity growth.
- Property rights.
- Rents.
- Social Protections and Labor.
- Trade liberalization.
- Trade reforms.
- Water and Industry.
- Water Resources.
- Physical Description:
- 1 online resource (43 pages)
- Other Title:
- Korea And The Bics
- Place of Publication:
- Washington, D.C., The World Bank, 2009
- System Details:
- data file
- Summary:
- This paper tests a neo-Schumpeterian model with industry-level data to analyze how Brazil, India, and China are catching up with South Korea's technological frontier in a globalized world. The paper validates Aghion and others's inverted-U hypothesis that industries that are closer to the technological frontier innovate to escape competition while longer distances discourage innovating. It suggests that for effective catching up, distance-shortening (or innovation-enhancing) policies may be a necessary complement to liberalization. South Korea and China combined a variety of distance-shortening policies with financial subsidies to promote high tech industries and an export-led growth strategy. Post-liberalization, they leveraged swift competition to spur catch-up. In comparison, Brazil, which was as rich as South Korea, and India, which was as rich as China in 1980, are catching up more slowly. Import-substitution industrialization strategies saddled Brazil and India with a large anti-export bias, and unfocused attention to innovation-enhancing policies dampened global competitiveness. Post liberalization, many of their industries were too far behind the technological frontier to effectively benefit from competition. The catch-up experiences of Brazil, India, and China with South Korea illustrate that distance from the technological frontier matters and that the design of country-specific distance- shortening policies can be an important complement to trade liberalization in promoting catching up with richer countries.
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