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Korea and the BICs (Brazil, India and China) : catching up experiences

Author

Listed:
  • V. Chandra
  • Osorio-Rodarte , I.
  • Braga, C. A. Primo
Abstract
This paper tests a neo-Schumpeterian model with industry-level data to analyze how Brazil, India, and China are catching up with South Korea’s technological frontier in a globalized world. The paper validates Aghion et al.’s inverted-U hypothesis that industries that are closer to the technological frontier innovate to escape competition while longer distances discourage innovating. It suggests that for effective catching up, distance-shortening (or innovation-enhancing) policies may be a necessary complement to liberalization. South Korea and China combined a variety of distance-shortening policies with financial subsidies to promote high tech industries and an export-led growth strategy. Post-liberalization, they leveraged swift competition to spur catch-up. In comparison, Brazil, which was as rich as South Korea, and India, which was as rich as China in 1980, are catching up more slowly. Import-substitution industrialization strategies saddled Brazil and India with a large anti-export bias, and unfocused attention to innovation-enhancing policies dampened global competitiveness. Post liberalization, many of their industries were too far behind the technological frontier to effectively benefit from competition. The catch-up experiences of Brazil, India, and China with South Korea illustrate that distance from the technological frontier matters and that the design of country-specific distance- shortening policies can be an important complement to trade liberalization in promoting catching up with richer countries.

Suggested Citation

  • V. Chandra & Osorio-Rodarte , I. & Braga, C. A. Primo, 2009. "Korea and the BICs (Brazil, India and China) : catching up experiences," Policy Research Working Paper Series 5101, The World Bank.
    • Handle: RePEc:wbk:wbrwps:5101
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    Citations

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    Cited by:

    1. Bartelsman, Eric & Dobbelaere, Sabien & Peters, Bettina, 2013. "Allocation of Human Capital and Innovation at the Frontier: Firm-Level Evidence on Germany and the Netherlands," IZA Discussion Papers 7540, Institute of Labor Economics (IZA).
    2. M. Arkhipova & V. Sirotin & V. Afonina, 2019. "Cooperation in R&D as a Leading Indicator of Innovative Activity Growth," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(Special 2), pages 242-257.
    3. Godinho, Manuel Mira & Ferreira, Vítor, 2012. "Analyzing the evidence of an IPR take-off in China and India," Research Policy, Elsevier, vol. 41(3), pages 499-511.
    4. Biru Paksha Paul & Anupam Das, 2012. "Export-led Growth in India and the Role of Liberalisation," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 6(1), pages 1-26, February.

    More about this item

    Keywords

    Labor Policies; Economic Theory&Research; Water and Industry; E-Business; Knowledge for Development;
    All these keywords.

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