Accumulation, exports, and growth in the high-performing Asian economies

TLDR

Unusual investment ratios and initial education levels explain part of the high growth, but micro‑economic evidence shows that manufactured export growth has also boosted industrial productivity. The study examines potential drivers of rapid per‑capita income growth in several Asian economies through cross‑country regressions. The authors use cross‑country regressions to evaluate the influence of different variables on per‑capita income growth. The regressions indicate that unusual export performance accounts for part of the rapid per‑capita income growth, yet growth still exceeds predictions after this effect is included.

Abstract

Potential sources of the very rapid growth in per capita income in a number of Asian countries are considered using cross-country regressions. While unusual investment ratios and initial levels of education both play a role, the superior performance is not totally explained by these variables. A growing body of microeconomic evidence suggests that the growth of manufactured exports may have allowed the industrial sector in these countries to increase its productivity. The cross-country regressions show that part of the rapid growth of per capita income in these countries is attributable to their unusual export performance. Even after incorporating this effect, their per capita income growth remains somewhat greater than predicted.