"Trade and Growth: Import-Led or Export-Led? Evidence From Japan
and Korea"
BY: ROBERT Z. LAWRENCE
Harvard University
John F. Kennedy School of Government
National Bureau of Economic Research (NBER)
DAVID E. WEINSTEIN
Columbia University
Department of Economics
National Bureau of Economic Research (NBER)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=199493
Paper ID: NBER Working Paper No. W7264
Date: July 1999
Contact: ROBERT Z. LAWRENCE
Email: Mailto:robert_lawrence at harvard.edu
Postal: Harvard University
John F. Kennedy School of Government
79 John F. Kennedy Street
Cambridge, MA 02138 USA
Phone: 617-495-1118
Fax: 617-496-0063
Co-Auth: DAVID E. WEINSTEIN
Email: Mailto:dew35 at columbia.edu
Postal: Columbia University
Department of Economics
MC 3308
420 W. 118th Street
New York, NY 10027 USA
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ABSTRACT:
It is commonly argued that Japanese trade protection has enabled
the nurturing and development internationally competitive firms.
The results in our paper suggest that when it comes to TFP
growth, this view of Japan is seriously erroneous. We find that
lower tariffs and higher import volumes would have been
particularly beneficial for Japan during the period 1964 to
1973. Our results also lead us to question whether Japanese
exports were a particularly important source of productivity
growth. Our findings on Japan suggest that the salutary impact
of imports stems more from their contribution to competition
than to intermediate inputs. Furthermore our results indicate a
reason for why imports are important. Greater imports of
competing products spur innovation. Our results suggest that
competitive pressures and potentially learning from foreign
rivals are important conduits for growth. These channels are
even more important as industries converge with the market
leader. This suggests that further liberalization by Japan and
other East Asian countries may result in future dynamic gains.
Our results thus call the views of both the World Bank and the
revisionists into question and provide support for those who
advocate more liberal trade policies.
JEL Classification: F14, F40