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Seoul Journal of Economics - Vol. 21 , No. 4

[ Article ]
Seoul Journal of Economics - Vol. 21, No. 4, pp. 551-577
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 30 Nov 2008
Received 23 Jun 2008 Revised 05 Dec 2008

Multifactor Productivity in Korea and an International Comparison: Data and Productivity Estimates of the Korea Industrial Productivity Database
Hyunbae Chun ; Hak K. Pyo ; Keun Hee Rhee
Associate Professor, Department of Economics, Sogang University, Seoul 121-742, Korea, Tel: +82-2-705-8515, Fax: +82-2-704-8599 (hchun@sogang.ac.kr)
Professor, Department of Economics, Seoul National University, Seoul 151-746, Korea, Tel: +82-2-880-6395, Fax: +82-2-886-4231 (pyohk@plaza.snu.ac.kr)
Senior Researcher, Korea Productivity Center, Seoul 110-751, Korea, Tel: +82-2-724-1054, Fax: +82-2-724-1050 (ghlee@kpc.or.kr)

JEL Classification: O14, O47


The purpose of our study is to identify sources of economic growth for the Republic of Korea, which experienced a financial crisis in 1997 after joining the OECD. We provide estimates of output, input, and productivity based on the newly constructed Korea Industrial Productivity (KIP) database following EU KLEMS project guidelines. We find that Korea’s catch-up process with industrial nations during its period of late industrialization has been predominantly input-led and manufacturing-based. However, following the financial crisis in December 1997, the Korean economy growth seems to have shifted to productivity-led growth. However, lower productivity in the service industries seems to work against a renewed sustainable growth path.

Keywords: Economic growth, EU KLEMS, Korea Industrial Productivity (KIP) database, Multifactor productivity


We are grateful to Michael Denny, Erwin Diewert, Kyoji Fukao, Dongseok Kim, Tsutomu Miyagawa, participants at the 2008 World Congress on National Accounts and Economic Performance Measures for Nations, OECD, the International Conference on Total Factor Productivity Based on KLEMS Industrial Database, and RIETI Workshop on Productivity Database in China, Japan, and Korea, and two anonymous referees for valuable comments and suggestions. We appreciate the research assistance of the EU KLEMS Korea Project Team at Seoul National University: Eunkyung Jeon, Sun Young Jung, and Jungsam Cho. We acknowledge funding from the Korea Productivity Center and the Bank of Korea.

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