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Emergent Economies, Divergent Paths

Economic Organization and International Trade in South Korea and Taiwan (Structural Analysis in the …

By Gary G. Hamilton, Robert C. Feenstra

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| Hardcover | 9780521622097

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Book Description

The result of a collaboration between a leading trade economist and a leading economic sociologist specializing in East Asia, this volume offers an original explanation of the development paths of post-World War II Korea and Taiwan. that attempts to reshape the way economists, sociologists, and poliContinue

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Feenstra and Hamilton demonstrated the different features of Taiwanese and Korean business groups. The concentration rate and network of business groups are divergence in Taiwan (low and small) and in Korea (high and large). The market niches and forms of organizations in the two economies are dicho ... (continue)

Feenstra and Hamilton demonstrated the different features of Taiwanese and Korean business groups. The concentration rate and network of business groups are divergence in Taiwan (low and small) and in Korea (high and large). The market niches and forms of organizations in the two economies are dichotomy. Therefore, the authors set up two models of industrial organizations and claimed that it is hard to be in-between based on the path dependence of the economic institutions.
Moreover, they also criticized the alternative explanations. First, the developmental statist neglected the state failure of industrial policies, especially those tried to reverse the industrial structures in Taiwan and Korea but failed. Although state matters, its rationality or impacts should not be over-estimated.
Second, the comparative advantage of trade did not imply the effects of increasing export to the economic growth of the NICs. Rather, the neoclassical theory suggested that there should be an equilibrium between import and export in the long-run. So it cannot explain the differences of reactions of industries between Taiwan and Korea.
Third, largely agreed with the aspects of economic sociology such as network studies and social embedded, they criticized that the economic sociologists ignored the market competition and demand. In short, the retail revolution increased the US demand is definitely important for the Asian Miracle.

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