How and why did South Korea transition to an economic model of export-led industrialization?

Taking as its motivating puzzle South Korea’s remarkable economic development over the past half-century, this paper examines the logic of South Korea’s transition to an economic model of export-led industrialization. I propose a theory of the origins of the transition to export-led industrialization that differs from the dominant arguments in the existing literature. I argue that the willingness of foreign capital to make substantial investments of capital and technology can play a large role in a country’s decision to shift to an economic model of export-led industrialization. This, in turn, requires a strong state to mediate the relationship between foreign and domestic capital. I then map the experience of South Korea onto my theory. South Korea had substantial economic growth in the early years of the Park era in large part because of the willingness of Japanese business to make investments of capital and technology. Furthermore, the developmental state in South Korea emerged because these initial relationships between Japanese and Korean capital required mediation by the South Korean state.