Does Export-led Growth Still Work for the South Korean Economy? Before and After the 1997/98 Asian Crisis

The export-led growth hypothesis has been examined for South Korea, which has long been regarded as a typical export-oriented economy. In particular, the expansion of exports in South Korea is reinforced by the imports of raw materials and intermediate goods from overseas, and the exports of manufactured final goods increase at a greater rate than the import growth. In this case, net exports rise. One striking result we have found is that for the earlier sample period of 1972-1996 prior to the 1997/98 Asian crisis, changes in net exports had a significant impact on economic growth; but the growth effect of net exports has been mitigated and insignificant for the recent years of 1999-2017. The two contrasting results we have found reflect the structural changes experienced by the South Korean economy after the 1997/98 economic crisis.