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Riding into the Sunset: The Political Economy of Bicycles as a Declining Industry in Korea

Park, Hun Joo / Park, Yeun-Sook

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Abstract

This paper investigates the causes underlying the tragic story of Korea's bicycle industry from what appeared to be as competitive as Taiwan's up until the 1970s to its complete dissolution and collapse. Whereas Taiwan went on to overtake Japan as the world's number one bicycle exporter by 1980, Korea's bicycle industry peaked in the late 1980s without ever reaching its maturity both in terms of export and production performances and then hopelessly declined to fall apart by the late 1990s. This paper examines three key causal factors: Samchuly-Kia's monopolistic complacency; Korea's industrial structure and the assembler-supplier relations; and the state's unbalanced and big chaebol-biased industrial policies. In so doing, it contributes to rethinking and redefining the role of government and industrial policy in managing so-called sunset industries.

Issue Date
2004-07
Publisher
KDI School of Public Policy and Management
Keywords
Bicycles; Sunset industry; Industrial upgrading; Small business; South Korea
Pages
33
Series Title
KDI School Working Paper 04-15
DOI
10.2139/ssrn.598541
Language
ENG
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