Dynamic Capabilities of Japanese and Korean Enterprises and the ‘Flying Geese’ of International Competitiveness

Abstract

Click to increase image sizeClick to decrease image size Notes 1. See Wade, 1995, Lall, 1994 Lall, S. 1994. ‘The East Asian Miracle: Does the Bell Toll for Industrial Strategy?’. World Development, 22(4): 645–54. [Crossref], [Web of Science ®] , [Google Scholar] , and Perkins, 1994 Perkins, DH. 1994. ‘There are at Least Three Models of East Asian Development’. World Development, 22(4): 655–61. [Crossref], [Web of Science ®] , [Google Scholar] , for a detailed review. 2. See Hattori, 1999 Hattori T 1999 ‘Economic Development and Technology Accumulation: Experience of South Korea’ Economic and Political Weekly May 78 84 [Google Scholar], Hart-Landsberg and Burkett, 1998, and Bernard and Ravenhill, 1995 Bernard, M and Ravenhill, J. 1995. ‘Beyond Product Cycles and Flying Geese’. World Politics, 47: 171–209. [Crossref], [Web of Science ®] , [Google Scholar]. 3. See Goldar and Ishigami, 1999 Goldar B Ishigami E 1999 ‘Foreign Direct Investment in Asia’ Economic and Political Weekly May 50 65 [Google Scholar]. 4. The United Nations Centre for Trade and Development (UNCTAD) had once dubbed industrial development in the region as the ‘flying geese pattern … based broadly on vertical division of labour among countries at different stages of industrialization, with competitiveness in previously established export sectors continuously shifting the advantage from countries at higher stages to those at lower ones, and with those at the higher stages continuously acquiring competitiveness in new product lines' (UNCTAD, 2002). 5. See Bernard and Ravenhill (1995 Bernard, M and Ravenhill, J. 1995. ‘Beyond Product Cycles and Flying Geese’. World Politics, 47: 171–209. [Crossref], [Web of Science ®] , [Google Scholar]). 6. In the flying geese analogue, the lead country is the leading goose followed by follower countries ‘flying’ in close formation. 7. Although reference is made here simply to consumer goods and capital goods, there are many kinds and qualities within these groups. Accordingly, the sequential phenomenon of M–P–E (import–production–exports) occurs not only in connection with capital goods following consumer goods but also in the progression from crude and simple goods to complex and refined goods Akamatsu, 1961: 208). 8. For a comparative account of Korean development see Lall (1995 Lall, S. 1995. ‘Policy in the New NIEs: Introduction’. Journal of International Development, 7(5): 741–3. [Crossref] , [Google Scholar]). 9. See Hattori Tamio, ‘Economic Development and Technology Accumulation: Experience of South Korea’, Economic and Political Weekly, May, 1999, pp.78–84. 10. See Hattori Tamio, ‘Economic Development and Technology Accumulation: Experience of South Korea’, Economic and Political Weekly, May, 1999, pp.78–84. See also UNCTAD (2002 United Nations Conference on Trade and Development (UNCTAD) (2002), World Investment Report 2002: Transnational Corporations and Export Competitiveness (Geneva and New York: United Nations), United Nations publication E.02.II.D.4. [Google Scholar]). 11. But this surplus has been reducing lately as the latest WIR report shows. In fact Japan's reverse imports from affiliates abroad have risen from 4 per cent in 1989 to around 15 per cent in 1999 (WIR, 2002). 12. That is the null hypothesis. 13. Surveys by Hattori (1999 Hattori T 1999 ‘Economic Development and Technology Accumulation: Experience of South Korea’ Economic and Political Weekly May 78 84 [Google Scholar]) and Goldar and Ishigami (1999 Goldar B Ishigami E 1999 ‘Foreign Direct Investment in Asia’ Economic and Political Weekly May 50 65 [Google Scholar]) are instructive. 14. However, the leading countries in R&D spending around the world include Japan and Korea, with Korea now spending over 3 per cent of its GDP on R&D. High level scientific and engineering skills of Korea's human capital have enabled it to counteract the rapid rate of product obsolescence in global industries. 15. On this issue, Porter (1990 Porter, ME. 1990. ‘The Competitive Advantage of Nations’. Harvard Business Review, 68(2): 73–93. [Web of Science ®] , [Google Scholar]) observes ‘ …no nation can or will be competitive in every or even most industries. Ultimately nations succeed in particular industries because their home environment is most forward looking, dynamic and challenging.’ (1990: 74; emphasis added). 16. The original had several cases missing and hence had to be cleaned. It appears that the Korean industry structure is highly monopolistic vis-à-vis Japan's and hence reflects the smaller value of n in Korea's case. 17. By way of the interaction between the variables. 18. We draw on the works of Hattori (1999 Hattori T 1999 ‘Economic Development and Technology Accumulation: Experience of South Korea’ Economic and Political Weekly May 78 84 [Google Scholar]). 19. Apparently, the offices of Korean engineers are separated from the workplace, and if some trouble occurs there, workers have to come to the office but engineers do not go the shop floor. 20. These are often coupled with rising protectionism as practised in some developed countries like the USA and Japan.