Working Paper: CEPR ID: DP13825
Authors: Philippe Aghion; Sergei Guriev; Kangchul Jo
Abstract: We study firm dynamics in Korea before and after the 1997-98 Asian crisis and pro-competitive reforms that reduced the dominance of chaebols. We find that in industries that were dominated by chaebols before the crisis, labor productivity and TFP of non-chaebol firms increased markedly after the reforms (relative to other industries). Furthermore, entry of non-chaebol firms increased significantly in all industries after the reform. Finally, after the crisis, the non-chaebol firms also significantly increased their patenting activity (relative to non-chaebol firms). These results are in line with a neo-Schumpeterian view of transition from a growth model based on investment in existing technologies to an innovation-based model.
Keywords: Schumpeterian growth; chaebols; Asian crisis
JEL Codes: O43; L25
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Reforms (E69) | Labor productivity of non-chaebol firms (L23) |
| Reforms (E69) | Total Factor Productivity (TFP) of non-chaebol firms (L22) |
| Reforms (E69) | Entry rates of non-chaebol firms (L22) |
| Reforms (E69) | Patenting activity of non-chaebol firms (L22) |