Industrial Organization and Product Quality: Evidence from South Korean and Taiwanese ExportsThe central focus of this paper is on the relationship between domestic market structure and export performance. It evaluates the hypothesis that more concentrated industrial sectors can achieve more easily the transition from standardized, labor-intensive manufactures to sophisticated, skill intensive products, as such industries are better able to cope with the inevitable reputational externalities involved in producing high-quality goods for foreign markets. South Korea and Taiwan provide a good test of the theory, as they have sharply different market structures. The results of the empirical analysis provide strong support for the hypothesis. |
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1050 Massachusetts Avenue actual quality analysis Andrei Shleifer average quality level base metal 1807 Brian Levy Bureau of Economic Business Cycle capita christmas ornaments concentrated industries conglomerates disaggregated discussion distribution of firms Economic Research enterprises entrants EVIDENCE FROM SOUTH Exchange Rate export performance EXPORTS Dani Rodrik Eyeglasses Ferrites firm's foreign Fur clothing Garm Herfindahl index high-end products high-quality higher quality higher unit values higher-quality home exports hypothesis Hyundai industrial organization patterns industry structure Integrated Circuits invest in reputation iron or steel Japanese unit values Korea and Taiwan KOREA TAIWAN Korean and Taiwanese low-end market structure motor veh NBER nspf of base ORGANIZATION AND PRODUCT output perceived quality product groups product quality quality choice quality range quality spectrum respect to product Robert role Samsung Scitovsky 1986 sj² South Korea Table TAIWANESE EXPORTS Dani Taiwanese unit values Takatoshi Ito transition U.S. import UNIVERSITY OF CALIFORNIA wood veneer