{
  "title": "Industrialization and the Big Push: Theory and Evidence from South Korea",
  "publication": "IMF Working Papers, December 20, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2024/12/19/industrialization-and-the-big-push-theory-and-evidence-from-south-korea-559545",
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  "summary": "We study how one-time subsidies for adoption of modern technology drove Korea's industrialization in the 1970s. Leveraging unique historical data, we provide causal evidence consistent with coordination failures: adoption improved adopters' performance and generated local spillovers, with firms more",
  "sections": [
    {
      "heading": "Research question and approach",
      "content": "- Study objective: how one-time subsidies for adoption of modern technology drove Korea's industrialization in the 1970s.\n- Data and identification: leveraging unique historical data to provide causal evidence consistent with coordination failures.\n- Methods: empirical causal analysis combined with a quantitative model calibrated using parameters mapped to the causal estimates."
    },
    {
      "heading": "Key empirical findings",
      "content": "- Adoption improved adopters' performance.\n- Adoption generated local spillovers.\n- Firms were more likely to adopt when other local firms had already adopted.\n- Evidence pattern is consistent with coordination failures (complementarities across firms in adoption decisions)."
    },
    {
      "heading": "Quantitative model and calibrated results",
      "content": "- Model feature: potential for multiple steady states depends on parameters mapped to the causal estimates.\n- Calibrated outcomes attributed to Korea's one-time subsidies:\n  - Increased heavy manufacturing's GDP share by 8.6%.\n  - Increased export intensity by 16.2%.\n- Mechanism noted: larger market access amplifies the effects of these subsidies because gains from adoption increase with firms' scale."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Economic sectors, Exports, Financial sector policy and analysis, International trade, Manufacturing, Spillovers, Technology\n- Keywords: adopter share, adoption increase, Big push, Complementarity, Coordination failure, Exports, Global, IMF working paper No. 2024/259, Industrialization, Korea's industrialization, Local spillover, Manufacturing, Market access, Spillovers, Younghun shim\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2024/12/19/industrialization-and-the-big-push-theory-and-evidence-from-south-korea-559545"
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    "Authors: Jaedo Choi, Younghun Shim",
    "Published: December 20, 2024",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400292927.001",
    "Study objective: how one-time subsidies for adoption of modern technology drove Korea's industrialization in the 1970s.",
    "Data and identification: leveraging unique historical data to provide causal evidence consistent with coordination failures.",
    "Methods: empirical causal analysis combined with a quantitative model calibrated using parameters mapped to the causal estimates.",
    "Adoption improved adopters' performance.",
    "Adoption generated local spillovers.",
    "Firms were more likely to adopt when other local firms had already adopted.",
    "Evidence pattern is consistent with coordination failures (complementarities across firms in adoption decisions).",
    "Model feature: potential for multiple steady states depends on parameters mapped to the causal estimates.",
    "Calibrated outcomes attributed to Korea's one-time subsidies:",
    "Mechanism noted: larger market access amplifies the effects of these subsidies because gains from adoption increase with firms' scale.",
    "Subject: Economic sectors, Exports, Financial sector policy and analysis, International trade, Manufacturing, Spillovers, Technology",
    "Keywords: adopter share, adoption increase, Big push, Complementarity, Coordination failure, Exports, Global, IMF working paper No. 2024/259, Industrialization, Korea's industrialization, Local spillover, Manufacturing, Market access, Spillovers, Younghun shim",
    "**Working Paper**"
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