Leapfrogging, consumer preferences, international trade and the intensity of metal use in less developed countries : The case of steel in Korea

Abstract

The greatest potential for metal demand growth is widely thought to lie with the less developed countries where in contrast to the more developed countries intensity of metal use is expected to rise over time. The historical record, however, is mixed, with some LDCs experiencing rising and others declining intensities of use. This analysis of steel use in Korea suggests that the intensity of metal use is likely to rise in those LDCs where per capita income is growing rapidly, for in such countries the shift in domestic preferences toward metal intensive goods will normally more than offset the tendency for material substitution and resource saving technology to reduce the intensity of metal use. Conversely, intensity of metal use is likely to fall in LDCs where per capita income is stagnant or growing slowly. These findings suggest future growth in LDC metal demand will be largely concentrated in those countries experiencing rapid economic development.