Rural Industrialization in East Asia

  • Keijiro Otsuka
  • Abhijit V. Banerjee
Part of the International Economic Association Series book series (IEA)


In order to achieve sustainable economic growth with equitable income distribution in the face of a rapidly growing population in the developing world, lucrative new job opportunities must be continuously created, particularly for the poor in both urban and rural areas. It has become increasingly clear that the widely adopted, urban-based industrialization strategy has limitations for the creation of new jobs for the poor, because of the adoption of inappropriate technologies biased towards saving unskilled labour. Furthermore, in high-performance Asian economies, such as Thailand and Indonesia, rapid urbanization has resulted in serious congestion, environmental pollution, and a high cost of living in large cities.


Total Factor Productivity Community Norm Economic Organization Garment Industry Total Unit Cost 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Amsden, A.H. (1985) ‘The Division of Labor is Limited by the Rate of Growth of the Market: The Taiwan Machine Tool Industry in the 1970s’, Cambridge Journal of Economics, vol. 9, no. 3, pp. 271–84.Google Scholar
  2. Amsden, A.H. (1989) Asia’s Next Giant: South Korean and Late Industrialization (New York: Oxford University Press).Google Scholar
  3. Amsden, A.H. (1991) ‘Big Business and Urban Congestion in Taiwan: The Origins of Small Enterprises and Regionally Decentralized Industry (Respectively)’, World Development, vol. 19, no. 9, pp. 1121–35.CrossRefGoogle Scholar
  4. Asanuma, B. (1985) ‘The Organization of Parts Purchases in the Japanese Automotive Industry’, Japanese Economic Studies, vol. 13, no. 4, pp. 32–53.Google Scholar
  5. Chen, H. and S. Rozelle (1995) ‘Local Leaders, Managers, and the Organization of Township and Village Enterprises in China’, mimeo, Food Research Institute, Stanford University.Google Scholar
  6. Chinn, D.L. (1979) ‘Rural Poverty and the Structure of Farm Household Income in Developing Countries: Evidence from Taiwan’, Economic Development and Cultural Change, vol. 27, no. 2, pp. 283–301.CrossRefGoogle Scholar
  7. David, C.C. and K. Otsuka (1994) Modern Rice Technology and Income Distribution in Asia (Boulder: Lynne Rienner).Google Scholar
  8. Fafchamps, M. and B. Helms (1996) ‘Local Demand, Investment Multipliers, and Industrialization: Theory and Application to the Guatemalan Highlands’, Journal of Development Economics, vol. 49, no. 1, pp. 61–92.CrossRefGoogle Scholar
  9. Hayami, Y. (ed.) (1998) ‘Toward an Alternative Paradigm of Economic Development: An Introduction’, in Y. Hayami (ed.), Toward the Rural-Based Development of Commerce and Industry: Selected Experiences from East Asia, (Washington DC: The World Bank).Google Scholar
  10. Hayami, Y. and T. Kawagoe (1993) The Agrarian Origin of Commerce and Industry: A Study of Peasant Marketing in Indonesia (London: Macmillan).CrossRefGoogle Scholar
  11. Hayami, Y. and K. Otsuka (1993) The Economics of Contract Choice: An Agrarian Perspective (Oxford: Clarendon Press).Google Scholar
  12. Ho, S.P.S. (1978) Economic Development of Taiwan, 1860–1970 (New Haven: Yale University Press).Google Scholar
  13. Ho, S.P.S. (1979) ‘Decentralized Industrialization and Rural Development’, Economic Development and Cultural Change, vol. 28, no. 1, pp. 77–96.CrossRefGoogle Scholar
  14. Ho, S.P.S. (1982) ‘Economic Development and Rural Industry in South Korea and Taiwan’, World Development, vol. 10, no. 11, pp. 973–90.CrossRefGoogle Scholar
  15. Hymer, S. and S. Resnick (1969) ‘A Model of an Agrarian Economy’, American Economic Review, vol. 59, no. 4, pp. 493–506.Google Scholar
  16. Itoh, M. and M. Tanimoto (1998) ‘Rural Entrepreneurs in the Cotton Textile Industry in Japan’, in Hayami (1998).Google Scholar
  17. Kikuchi, M. (1998) ‘Export-Oriented Garment Industries in the Rural Philippines’, in Hayami (1998).Google Scholar
  18. Kuznets, P.W. (1988) ‘An East Asian Model of Economic Development: Japan, Taiwan, and South Korea’, Economic Development and Cultural Change, vol. 36, no. 3, Supplement, pp. S11-43.Google Scholar
  19. Lanjouw, J.O. and P. Lanjouw (1995) ‘Rural Nonfarm Employment: A Survey’, Policy Research Paper 1463, World Bank.Google Scholar
  20. Lee, J.-H. and C.-H. Suh (1998) ‘Rural Entrepreneurship and Industrial Development in Korea’, in Y. Hayami (1998).Google Scholar
  21. Levy, B. (1991) ‘Transaction Costs, the Size of Firms and Industrial Policy: Lessons from a Comparative Case Study of the Footwear Industry in Korea and Taiwan’, Journal of Development Economics, vol. 34, no. 1/2, pp. 151–78.Google Scholar
  22. Levy, B. and W.-J. Kuo (1991) ‘The Strategic Orientation of Firms and the Performance of Korea and Taiwan in Frontier Industries: Lessons from Comparative Studies of Keyboard and Personal Computer Assembly’, World Development, vol. 19, no. 4, pp. 363–74.CrossRefGoogle Scholar
  23. Little, I. M.D., D. Mazumdar and J.M. Page, Jr. (1983) Small Manufacturing Enterprises (New York: Oxford University Press).Google Scholar
  24. Liu, D. and K. Otsuka (1998) ‘Township-Village Enterprises in the Garment Sector of China’, in Hayami (1998).Google Scholar
  25. Mead, D.C. (1984) ‘Of Contracts and Subcontracts: Small Firms in Vertically Dis-integrated Production/Distribution Systems in LDCs’, World Development, vol. 12, no. 11/12, pp. 1095–106.CrossRefGoogle Scholar
  26. Murakami, N., D. Liu and K. Otsuka (1994) ‘Technical and Allocative Efficiency among Socialist Enterprises: The Case of the Garment Industry in China’, Journal of Comparative Economics, vol. 19, no. 4, pp. 410–33.CrossRefGoogle Scholar
  27. Murakami, N., D. Liu and K. Otsuka (1996) ‘Market Reform, Division of Labor, and Increasing Advantage of Small-Scale Enterprises: The Case of the Machine Tool Industry in China’, Journal of Comparative Economics, vol. 23, no. 3, pp. 256–77.CrossRefGoogle Scholar
  28. Nugent, J.B. (1996) ‘What Explains the Trend Reversal in the Size Distribution of Korean Manufacturing Establishments?’, Journal of Development Economics, vol. 48, no. 2, pp. 225–51.CrossRefGoogle Scholar
  29. Nugent, J.B. and M.K. Nabli (1992) ‘An Institutional Analysis of the Size Distribution of Manufacturing Establishments: An International Cross-Section Study’, World Development, vol. 20, no. 10, pp. 1489–99.CrossRefGoogle Scholar
  30. Ohno, A. and B. Jirapatpimol (1998) ‘The Rural Garment and Weaving Industries in Northern Thailand’, in Hayami (1998).Google Scholar
  31. Ohno, A. and M. Kikuchi (1998) ‘Organizational Characteristics of Rural Textile Industries in East Asia’, in Hayami (1998).Google Scholar
  32. Otsuka, K., D. Liu and N. Murakami (1998) Industrial Reform in China: Past Performance and Future Prospects (Oxford: Oxford University Press).Google Scholar
  33. Pack, H. and L.E. Westphal (1986) ‘Industrial Strategy and Technological Change: Theory vs. Reality’, Journal of Development Economics, vol. 22, no. 1, pp. 87–128.CrossRefGoogle Scholar
  34. Parikh, A. and E. Thorbecke (1996) ‘Impact of Rural Industrialization on Village Life and Economy: A Social Accounting Matrix Approach’, Economic Development and Cultural Change, vol. 44, no. 2, pp. 351–77.CrossRefGoogle Scholar
  35. Patrick, H.T. and T.P. Rohlen (1987) ‘Small-Scale Family Enterprises’, in K. Yamamura and Y. Yasuba (eds), The Political Economy in Japan, Vol. 1: The Domestic Transformation (Stanford: Stanford University Press).Google Scholar
  36. Ranis, G. (1995) ‘Another Look at the East Asian Miracle’, World Bank Economic Review, vol. 9, no. 3, pp. 509–34.CrossRefGoogle Scholar
  37. Ranis, G. and F. Stewart (1993) ‘Rural Nonagricultural Activities in Development: Theory and Application’, Journal of Development Economics, vol. 40, no. 1, pp. 75–101.CrossRefGoogle Scholar
  38. Resnick, S.A. (1970) ‘The Decline of Rural Industry under Export Expansion: A Comparison among Burma, Philippines, and Thailand, 1870–1938’, Journal of Economic History, vol. 30, no. 1, pp. 51–73.Google Scholar
  39. Schmitz, H. (1982) ‘Growth Constraints on Small-Scale Manufacturing in Developing Countries: A Critical Review’, World Development, vol. 10, no. 6, pp. 429–50.CrossRefGoogle Scholar
  40. Shinohara, M. (1968) ‘A Survey of the Japanese Literature on Small Industry’, in B.F. Hoselitz (ed.), The Role of Small Industry in the Process of Economic Growth (Hague: Mouton) pp. 1–113.Google Scholar
  41. Stigler, G.J. (1951) ‘The Division of Labor is Limited by the Extent of the Market’, Journal of Political Economy, vol. 59, no. 3, pp. 185–93.CrossRefGoogle Scholar
  42. Watanabe, S. (1970) ‘Entrepreneurship in Small Enterprises in Japanese Manufacturing’, International Labour Review, vol. 102, no. 6, pp. 531–76.Google Scholar
  43. Watanabe, S. (1971) ‘Subcontracting, Industrialization and Employment Creation’, International Labour Review, vol. 104, no. 1/2, pp. 51–76.Google Scholar
  44. Yang, M. (1994). ‘Reshaping Peasant Culture and Community: Rural Industrialization in a Chinese Village’, Modern China, vol. 20, no. 2, pp. 157–79.CrossRefGoogle Scholar
  45. Aleem, I. (1990) ‘Imperfect Information, Screening and the Costs of Informal Lending: A Study of Rural Credit Markets in Pakistan’, World Bank Economic Review, vol. 4, no. 3.Google Scholar
  46. Andrabi, T. and M. Ghatak (1995) ‘Imperfect Credit Markets, Social Capital and Industrial Organization in a Developing Economy: A Case Study of Sialkot, Pakistan’, mimeo, Department of Economics, University of Chicago.Google Scholar
  47. Banerjee, A.V. (1997) ‘Notes Towards a Theory of Industrialization in the Developing World’, mimeo, Massachusetts Institute of Technology.Google Scholar
  48. Banerjee, A.V. and A. Newman (1993) ‘Occupational Choice and the Process of Development’, Journal of Political Economy, vol. 101, no. 2, pp. 274–98.CrossRefGoogle Scholar
  49. Banerjee, A.V. and A. Newman (1998) ‘A Dual-Economy Model of Migration and Development’, forthcoming, Review of Economic Studies.Google Scholar
  50. Banerjee, A.V. and Kaivan Munshi (1997) ‘Social Networks and Vertical Integration: A Study of the Garment Industry in Tiruppur’, manuscript in preparation.Google Scholar
  51. Banerjee, N. (1995) ‘Labour, Institutions and the New Economic Order in India’, in Luarids Lauridsen (ed.), Institutions and Industrial Development: Asian Experience, Occasional Paper no. 16, Roskilde University.Google Scholar
  52. Legros, P. and A. Newman (1994) ‘Wealth Effects, Distribution and the Theory of Organization’, mimeo, Columbia University, Journal of Economic Theory, vol. 70, no. 2, pp. 312–41.CrossRefGoogle Scholar
  53. Newman, A. (1992) ‘The Capital Market, Inequality and the Employment Relation’, mimeo, Columbia University.Google Scholar
  54. Tiwari, M. (1993) ‘The State, Intersectoral Linkages, and the Historical Conditions of Accumulation in Ludhiana’s Industrial Regime’, mimeo, Massachusetts Institute of Technology.Google Scholar

Copyright information

© International Economic Association 1998

Authors and Affiliations

  • Keijiro Otsuka
    • 1
    • 2
  • Abhijit V. Banerjee
    • 3
  1. 1.International Food Policy Research InstituteUSA
  2. 2.Tokyo Metropolitan UniversityJapan
  3. 3.Massachusetts Institute of TechnologyUSA

Personalised recommendations