[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/not/notnic/2024-11.html
   My bibliography  Save this paper

Bureaucrats and the Korean export miracle

Author

Listed:
  • Philipp Barteska
  • Jay Euijung Lee
Abstract
Does bureaucratic capacity matter for growth miracles? This paper investigates how much the effect of an industrial policy during South Korea’s growth miracle depends on bureaucratic capacity. We find that the bureaucrats implementing the policy greatly change its effect on exports – the variable targeted by the policy and key to South Korea’s economic success. These bureaucrats manage offices that promote exports on appointments to 87 countries between 1965, when South Korea was one of the world’s poorest countries, and 2000. We exploit the three-yearly rotation of managers between countries to show that increasing bureaucrat ability by one standard deviation causes a 37% increase in exports. This effect is comparable to the policy’s average effect – estimated from office openings. Hence, this industrial policy entirely depends on bureaucratic capacity: It has no effect when implemented by a bureaucrat one standard deviation below average. We find evidence for a key mechanism via which better bureaucrats increase exports: transmitting information about market conditions. Under better bureaucrats South Korean exports increase more strongly with a country’s import demand – taking advantage of this demand. Finally, we investigate whether bureaucrat experience increases South Korean exports. We isolate quasi-random variation in experience: a product’s import demand growth during the bureaucrat’s first appointment. Such experience increases exports in subsequent appointments of this bureaucrat. This highlights that organizational capacity grows endogenously, implying a novel channel for path dependence in organizational capacity.

Suggested Citation

  • Philipp Barteska & Jay Euijung Lee, 2024. "Bureaucrats and the Korean export miracle," Discussion Papers 2024-11, Nottingham Interdisciplinary Centre for Economic and Political Research (NICEP).
    • Handle: RePEc:not:notnic:2024-11
    as

    Download full text from publisher

    File URL: https://www.nottingham.ac.uk/research/groups/nicep/documents/working-papers/2024/2024-11.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joshua D. Angrist & Jörn-Steffen Pischke, 2010. "The Credibility Revolution in Empirical Economics: How Better Research Design Is Taking the Con out of Econometrics," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 3-30, Spring.
    2. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 967-1015.
    3. Anders Frederiksen & Lisa B. Kahn & Fabian Lange, 2020. "Supervisors and Performance Management Systems," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2123-2187.
    4. Guido Friebel & Matthias Heinz & Nikolay Zubanov, 2022. "Middle Managers, Personnel Turnover, and Performance: A Long‐Term Field Experiment in a Retail Chain," Management Science, INFORMS, vol. 68(1), pages 211-229, January.
    5. Volpe Martincus, Christian & Carballo, Jerónimo, 2008. "Is export promotion effective in developing countries? Firm-level evidence on the intensive and the extensive margins of exports," Journal of International Economics, Elsevier, vol. 76(1), pages 89-106, September.
    6. Clément de Chaisemartin & Xavier D'Haultfœuille, 2020. "Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects," American Economic Review, American Economic Association, vol. 110(9), pages 2964-2996, September.
    7. Costinot, Arnaud & Atkin, David & Fukui, Masao, 2021. "Globalization and the Ladder of Development: Pushed to the Top or Held at the Bottom?," CEPR Discussion Papers 16741, C.E.P.R. Discussion Papers.
    8. Florence Kondylis & Mattea Stein, 2023. "The Speed of Justice," The Review of Economics and Statistics, MIT Press, vol. 105(3), pages 596-613, May.
    9. Oriana Bandiera & Michael Carlos Best & Adnan Qadir Khan & Andrea Prat, 2021. "The Allocation of Authority in Organizations: A Field Experiment with Bureaucrats," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(4), pages 2195-2242.
    10. Stéphane Bonhomme & Kerstin Holzheu & Thibaut Lamadon & Elena Manresa & Magne Mogstad & Bradley Setzler, 2023. "How Much Should We Trust Estimates of Firm Effects and Worker Sorting?," Journal of Labor Economics, University of Chicago Press, vol. 41(2), pages 291-322.
    11. Sultan Mehmood, 2022. "The Impact of Presidential Appointment of Judges: Montesquieu or the Federalists?," American Economic Journal: Applied Economics, American Economic Association, vol. 14(4), pages 411-445, October.
    12. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    13. Ashesh Rambachan & Jonathan Roth, 2023. "A More Credible Approach to Parallel Trends," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(5), pages 2555-2591.
    14. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    15. Guo Xu, 2018. "The Costs of Patronage: Evidence from the British Empire," American Economic Review, American Economic Association, vol. 108(11), pages 3170-3198, November.
    16. Marianne Bertrand & Antoinette Schoar, 2003. "Managing with Style: The Effect of Managers on Firm Policies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1169-1208.
    17. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    18. David Card & Ana Rute Cardoso & Patrick Kline, 2016. "Bargaining, Sorting, and the Gender Wage Gap: Quantifying the Impact of Firms on the Relative Pay of Women," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 633-686.
    19. Oriana Bandiera & Andrea Prat & Stephen Hansen & Raffaella Sadun, 2020. "CEO Behavior and Firm Performance," Journal of Political Economy, University of Chicago Press, vol. 128(4), pages 1325-1369.
    20. Alonso Alfaro-Urena & Juanma Castro-Vincenzi & Sebastian Fanelli & Eduardo Morales, 2023. "Firm Export Dynamics in Interdependent Markets," NBER Working Papers 31610, National Bureau of Economic Research, Inc.
    21. Sant’Anna, Pedro H.C. & Zhao, Jun, 2020. "Doubly robust difference-in-differences estimators," Journal of Econometrics, Elsevier, vol. 219(1), pages 101-122.
    22. Achyuta Adhvaryu & Namrata Kala & Anant Nyshadham, 2022. "Management and Shocks to Worker Productivity," Journal of Political Economy, University of Chicago Press, vol. 130(1), pages 1-47.
    23. Alonso Alfaro-Ureña & Isabela Manelici & Jose P Vasquez, 2022. "The Effects of Joining Multinational Supply Chains: New Evidence from Firm-to-Firm Linkages," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(3), pages 1495-1552.
    24. Adnan Q. Khan & Asim I. Khwaja & Benjamin A. Olken, 2016. "Tax Farming Redux: Experimental Evidence on Performance Pay for Tax Collectors," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(1), pages 219-271.
    25. Clare Leaver & Owen Ozier & Pieter Serneels & Andrew Zeitlin, 2021. "Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools," American Economic Review, American Economic Association, vol. 111(7), pages 2213-2246, July.
    26. Christian Volpe Martincus & Jerónimo Carballo, 2012. "Export promotion activities in developing countries: What kind of trade do they promote?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 21(4), pages 539-578, June.
    27. Jakob Munch & Georg Schaur, 2018. "The Effect of Export Promotion on Firm-Level Performance," American Economic Journal: Economic Policy, American Economic Association, vol. 10(1), pages 357-387, February.
    28. Adnan Q. Khan & Asim Ijaz Khwaja & Benjamin A. Olken, 2019. "Making Moves Matter: Experimental Evidence on Incentivizing Bureaucrats through Performance-Based Postings," American Economic Review, American Economic Association, vol. 109(1), pages 237-270, January.
    29. Michael Carlos Best & Jonas Hjort & David Szakonyi, 2023. "Individuals and Organizations as Sources of State Effectiveness," American Economic Review, American Economic Association, vol. 113(8), pages 2121-2167, August.
    30. John M. Abowd & Robert H. Creecy & Francis Kramarz, 2002. "Computing Person and Firm Effects Using Linked Longitudinal Employer-Employee Data," Longitudinal Employer-Household Dynamics Technical Papers 2002-06, Center for Economic Studies, U.S. Census Bureau.
    31. Ethan Mollick, 2012. "People and process, suits and innovators: the role of individuals in firm performance," Strategic Management Journal, Wiley Blackwell, vol. 33(9), pages 1001-1015, September.
    32. Mitchell Hoffman & Steven Tadelis, 2021. "People Management Skills, Employee Attrition, and Manager Rewards: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 129(1), pages 243-285.
    33. David Atkin & Amit K. Khandelwal & Adam Osman, 2017. "Exporting and Firm Performance: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(2), pages 551-615.
    34. Ernest Liu, 2019. "Industrial Policies in Production Networks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 1883-1948.
    35. Tun-Jen Cheng & Stephan Haggard & David Kang, 1998. "Institutions and growth in Korea and Taiwan: The bureaucracy," Journal of Development Studies, Taylor & Francis Journals, vol. 34(6), pages 87-111.
    36. Mitra Akhtari & Diana Moreira & Laura Trucco, 2022. "Political Turnover, Bureaucratic Turnover, and the Quality of Public Services," American Economic Review, American Economic Association, vol. 112(2), pages 442-493, February.
    37. Robert C. Feenstra & John Romalis, 2014. "International Prices and Endogenous Quality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 477-527.
    38. Kazunobu Hayakawa & Hyun-Hoon Lee & Donghyun Park, 2014. "Do Export Promotion Agencies Increase Exports?," The Developing Economies, Institute of Developing Economies, vol. 52(3), pages 241-261, September.
    39. Réka Juhász, 2018. "Temporary Protection and Technology Adoption: Evidence from the Napoleonic Blockade," American Economic Review, American Economic Association, vol. 108(11), pages 3339-3376, November.
    40. Choi, Jaedo & Shim, Younghun, 2022. "Technology adoption and late industrialization," MPRA Paper 115438, University Library of Munich, Germany.
    41. Pinelopi K. Goldberg & Tristan Reed, 2020. "Demand-Side Constraints in Development: The Role of Market Size, Trade, and (In)Equality," NBER Working Papers 27286, National Bureau of Economic Research, Inc.
    42. Marianne Bertrand & Robin Burgess & Arunish Chawla & Guo Xu, 2020. "The Glittering Prizes: Career Incentives and Bureaucrat Performance," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(2), pages 626-655.
    43. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    44. M. J. Andrews & L. Gill & T. Schank & R. Upward, 2008. "High wage workers and low wage firms: negative assortative matching or limited mobility bias?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 171(3), pages 673-697, June.
    45. Volpe Martincus, Christian & Carballo, Jerónimo, 2010. "Beyond the average effects: The distributional impacts of export promotion programs in developing countries," Journal of Development Economics, Elsevier, vol. 92(2), pages 201-214, July.
    46. Lederman, Daniel & Olarreaga, Marcelo & Payton, Lucy, 2010. "Export promotion agencies: Do they work?," Journal of Development Economics, Elsevier, vol. 91(2), pages 257-265, March.
    47. Volpe Martincus, Christian & Carballo, Jerónimo, 2010. "Beyond the average effects: The distributional impacts of export promotion programs in developing countries," Journal of Development Economics, Elsevier, vol. 92(2), pages 201-214, July.
    48. Alessandra Fenizia, 2022. "Managers and Productivity in the Public Sector," Econometrica, Econometric Society, vol. 90(3), pages 1063-1084, May.
    49. Ernesto Dal Bó & Frederico Finan & Nicholas Y. Li & Laura Schechter, 2021. "Information Technology and Government Decentralization: Experimental Evidence From Paraguay," Econometrica, Econometric Society, vol. 89(2), pages 677-701, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stjepan Srhoj & Vanja Vitezic & Joachim Wagner, 2020. "Export boosting policies and firm behaviour: Review of empirical evidence around the world," Working Paper Series in Economics 395, University of Lüneburg, Institute of Economics.
    2. Baltrunaite, Audinga & Bovini, Giulia & Mocetti, Sauro, 2023. "Managerial talent and managerial practices: Are they complements?," Journal of Corporate Finance, Elsevier, vol. 79(C).
    3. Alessandra Fenizia, 2022. "Managers and Productivity in the Public Sector," Econometrica, Econometric Society, vol. 90(3), pages 1063-1084, May.
    4. (ed.), 0. "Research Handbook on Economic Diplomacy," Books, Edward Elgar Publishing, number 16053.
    5. Chaudhary, Amit, 2021. "Do workers, managers, and stations matter for effective policing? A decomposition of productivity into three dimensions of unobserved heterogeneity," The Warwick Economics Research Paper Series (TWERPS) 1377, University of Warwick, Department of Economics.
    6. Bassi, Vittorio & Nyshadham, Anant & Tamayo, Jorge & Adhvaryu, Achyuta, 2020. "No Line Left Behind: Assortative Matching Inside the Firm," CEPR Discussion Papers 14554, C.E.P.R. Discussion Papers.
    7. Fanfani, Bernardo, 2022. "Tastes for discrimination in monopsonistic labour markets," Labour Economics, Elsevier, vol. 75(C).
    8. Engbom, Niklas & Moser, Christian & Sauermann, Jan, 2023. "Firm pay dynamics," Journal of Econometrics, Elsevier, vol. 233(2), pages 396-423.
    9. Dostie, Benoit & Li, Jiang & Card, David & Parent, Daniel, 2023. "Employer policies and the immigrant–native earnings gap," Journal of Econometrics, Elsevier, vol. 233(2), pages 544-567.
    10. Ajay Bhaskarabhatla & Luis Cabral & Deepak Hegde & Thomas Peeters, 2021. "Are Inventors or Firms the Engines of Innovation?," Management Science, INFORMS, vol. 67(6), pages 3899-3920, June.
    11. Jorge Alvarez & Felipe Benguria & Niklas Engbom & Christian Moser, 2018. "Firms and the Decline in Earnings Inequality in Brazil," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(1), pages 149-189, January.
    12. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    13. Ata Can Bertay & Jose Gabo Carreno & Harry Huizinga & Burak Uras & Nathanael Vellekoop, 2022. "Technological Change and the Finance Wage Premium," Working Papers tecipa-738, University of Toronto, Department of Economics.
    14. Tania Babina & Wenting Ma & Christian Moser & Paige Ouimet & Rebecca Zarutskie, 2019. "Pay, Employment, and Dynamics of Young Firms," Working Papers 19-23, Center for Economic Studies, U.S. Census Bureau.
    15. Caliendo, Marco & Cobb-Clark, Deborah A. & Pfeifer, Harald & Uhlendorff, Arne & Wehner, Caroline, 2024. "Managers’ risk preferences and firm training investments," European Economic Review, Elsevier, vol. 161(C).
    16. Olarreaga, Marcelo & Ugarte, Cristian, 2020. "Can export promotion reduce unemployment?," CEPR Discussion Papers 15049, C.E.P.R. Discussion Papers.
    17. Cruz, Gabriel & Rau, Tomás, 2022. "The effects of equal pay laws on firm pay premiums: Evidence from Chile," Labour Economics, Elsevier, vol. 75(C).
    18. Ahmed Boutorat & Loe Franssen, 2023. "Economic missions and firm internationalization: evidence from the Netherlands," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 159(3), pages 787-826, August.
    19. Simona Comi & Laura Resmini, 2020. "Are export promotion programs effective in promoting the internalization of SMEs?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(2), pages 547-581, July.
    20. Zhao, Da & Guo, Jingyuan & Yu, Shule & Yu, Litian, 2024. "Tradeoff between local protection and public sector performance: Lessons from judicial fiscal centralization," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 254-278.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:not:notnic:2024-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hilary Hughes (email available below). General contact details of provider: https://edirc.repec.org/data/nicepuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.