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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 17, No. 4, pp.439-482
ISSN: 1225-0279 (Print)
Print publication date 30 Nov 2004
Received 21 Dec 2004 Revised 16 Jan 2005

The Internationalization and Performance of Korean and Japanese Firms: An Empirical Analysis Based on Micro-Data

Sanghoon Ahn ; Kyoji Fukao ; Hyeog Ug Kwon
Research Fellow, Korea Development Institute, 207-41 Chongnyangri- Dong, Dongdaemun-Gu, Seoul 130-012, Korea ahn@kdi.re.kr
Professor, Hitotsubashi University and Faculty Fellow, RIETI, Institute of Economic Research, Hitotsubashi University, Naka 2-1, Kunitachi, Tokyo 186-8603, Japan, Tel: +81-42-580-8359, Fax: +81-42-580-8333 k.fukao@srv.cc.hit-u.ac.jp
Assistant Professor, Hitotsubashi University, Institute of Economic Research, Hitotsubashi University, Naka 2-1, Kunitachi, Tokyo 186-8603, Japan kwon2004@ier.hit-u.ac.jp

JEL Classification: D24, F10, F20, O40

Abstract

Both Korea and Japan are leading exporting countries of advanced manufactured products, and the competitive and efficient manufacturing activities are important pillars of the affluence of the two economies. Yet, comparing the manufacturing sectors of the two countries in the 1990s brings to light a startling contrast in their performance. Applying the same empirical method to the analysis of micro-data for Japanese manufacturing firms for 1994-2001 and Korean manufacturing plants for 1990-8, this paper examines differentials in Japanese and Korean productivity growth. This paper focuses on the role of competition in firm dynamics and on the importance of internationalization as a major determinant of firm performance.

Keywords:

Total factor productivity (TFP), Exporting, Foreign direct investment (FDI), Micro-data

Acknowledgments

respectively. We are grateful to the discussant, Professor Young Sik Kim, and participants of the Japan-Korea Industrial Economics Workshop for their comments and suggestions on a preliminary version of this paper.

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