Long-Term Shifts in Korean Manufacturing and Plant-Level Productivity Dynamics
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.
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| Format: | Working Paper biblioteca |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020-06
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| Subjects: | STRUCTURAL CHANGE, MANUFACTURING, PRODUCTIVITY DYNAMICS, FIRM ENTRY, FIRM EXIT, RESOURCE MISALLOCATION, |
| Online Access: | http://documents.worldbank.org/curated/en/702591592244062356/Long-Term-Shifts-in-Korean-Manufacturing-and-Plant-Level-Productivity-Dynamics https://hdl.handle.net/10986/33940 |
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| Summary: | 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. |
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