Manufacturing Revolutions - Industrial Policy and Networks in South Korea
Abstract - This paper uses a historic big push intervention with digitized data from South Korea to study the effects of industrial policy on (short- and long-run) industrial development. In 1973 South Korea transitioned to a military dictatorship and drastically changed their development strategy. I find industries targeted by the regime's big push grew significantly more than non-targeted industries along several key dimensions of industrial development. These developmental effects persisted after industrial policies were retrenched, following the 1979 assassination of the president. Furthermore, I estimate the spillovers of the industrial policies using exogenous variation in the exposure to the policy across the input-output network. I find evidence of persistent pecuniary externalities like those posited by big push development theorists, such as Albert Hirschman. In other words, I find that South Korea’s controversial industrial policy was successful in producing industrial development, the benefits of which persisted through time and in industries not directly targeted by the policies.
with Melissa Dell and Pablo Querubin. "The Historical State, Local Collective Action, and Economic Development in Vietnam." Forthcoming. Econometrica.
University of Technology Sydney
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The Blended Finance and Industrial Policy Conference
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