Abstract

This paper analyzes South Korea's automobile industry and demonstrates how a semi-periphery can successfully develop and automobile industry without its own basis of advanced technology or large accumulation of capital. By utilizing the global commodity chains perspective with and emphasis on its governance structure, the PDCC (the producer-driven commodity chains), the paper identifies several key features which distinguish the South Korean automobile industry from its counterparts in other developing nations. South Korea has a thriving automobile industry. In 1999 it was the world's seventh largest producer of automobile with more than 2.8 million units, the sixth largest exporter of automobiles with more than 1.5 million units, and the fourth largest producer of automobile components. Moreover, South Korea's automobile industry experienced an astonishingly rapid growth rate with and annual average growth rate of 26.7 percent between 1962-68. South Korea's automobile industry is also noteworthy in that it has built its own technology and models, when only about ten countries in the world have indigenous technology and models. The South Korean automobile industry combines both core and semi-peripheral characteristics, challenging several assumptions about a PDCC from the World System perspective and the commodity chains perspective. It demonstrates, foremost, that and automobile industry can thrive in a semi-periphery. Second, South Korea's automobile industry is focused not only on the manufacture of parts and supplies, but on a full-fledged assembly of finished automobiles, which is difficult to find tin a semi-periphery. Third, due to the relatively small domestic market, South Korea's automobile has engaged in exports to gain necessary economics of scale. Fourth, South Korean automobile exports have been based more on price competitiveness than on technological advances, although this pattern has begun to change recently. Price competitiveness is usually found as a comparative advantage for a semi-periphery in less capital and technology-intensive light manufactured industries, in a buyer-driven commodity chain (BDCC). In other words, the South Korean automobile industry does not show the typical characteristic of a PDCC.  Finally, large domestic corporations rather than transnational corporations (TNCs) have dominated the South Korean automobile industry, and developed indigenous technology and models.