Is Korea Being Deindustrialized?(Vol.7 No.1)

Hyunjoon Lim
:Economist, Economic Research Team, Gwangju&Jeonnam Branch, the Bank of Korea(E-mail: limhj1@bok.or.kr)
 
  This study shows that the Korean economy has been deindustrialized since the late 1980s in terms of employment and nominal output in that the share of the manufacturing sector in the economy as a whole has decreased whereas that of the service industry has increased and, in contrast, is not yet at the stage of deindustrialization in terms of real production.
  As the result of theoretical and empirical analysis presented here, the deindustrialization in Korea is taking place spontaneously in the course of its economic growth―the more rapid productivity growth in the manufacturing sector and changes in the pattern of consumption due to income growth. In addition, increasing foreign direct investment, which have allegedly been responsible for the hollowing out of manufacturing industry, turn out to have had little to do with the deindustrialization process.

JEL Classification Number : O11, O41, F43
Key words :deindustrialization,differentialsinproductivitygrowthrates,changesin
             consumption pattern,foreigndirectinvestment