Export Development, Product Life Cycle and LDCs: The Case of Korea

Few would disagree that international trade is a dynamic phenomenon. Its dynamics have been theorized and empirically studied by a considerable number of economists and international business researchers, from an equally wide number of viewpoints.1 While considerable disagreement remains among these experts as to the cost/benefits of trade in terms of economic development, there does appear to be a growing consensus that "outward look- ing" strategies (export development) may have a wider applicabili- ty and success potential for LDCs than "inward looking strategies" (e.g., import substitution). The success of Japan, Taiwan, Hong Kong, and more recently, Korea, are classic examples. Related to the theory and strategy of export development is the theory of in- ternatinal product life cycles (PLC) as developed by Vernon (1966) and Wells (1972). The international dynamics of PLC are reasonably straightforward: the locus of production of a given pro- duct shifts internationally from its country of inception (histori- cally, mostly from the U.S.) to other developed countries (again, historically mainly the EEC) and ultimately to LDCs, as the pro- duct grows through its life cycle from its new, innovative stage to its