Evolution of East Asian Capitalism; A Comparative Case Study on Flat Panel Display Industry in Japan and South Korea

This research examines why two similar institutional configurations of Japan and South Korean business systems manifest distinct features, especially in the degree of institutional change. Recent studies on the change of Asian capitalisms indicate the existence of diversity among them and the limitation of dichotomous typologies in traditional comparative capitalism (CC) approach. In order to develop the relatively ignored debate of Asian capitalism, this research attempts to clarify ambiguous distinctions between Japan and South Korean business systems and to provide fresh empirical evidence.

According to suggestions of recent CC studies, this paper focus more on messo- and firm-level analysis rather than simply compare national indicators between countries. Particularly, comparative case study was conducted on flat panel display industry (FPD) in which Japan has lost its dominant power while South Korea has achieved competitive advantages against Japan for the last two decades. This empirical research can be useful for three debates within CC studies. First, it may help to clarify more concrete distinction of two similar business systems, especially with respect to the inter-firm relationship; Japanese Keiretsu and Korean Chaebol seems to be similar as a sort of business group but their functions in their economies are fundamentally different. Second, this work may help to reveal the relationship among different levels of institutional arrangements such as the interplay between national institutions and a sub-sectoral (industrial) system. Thirdly, it illustrates how different dynamics occur between seemingly similar institutional configurations when it comes to linking with the processual perspective and international context.

Comparing enlightening works from Amsden in around 1990s, Whitley in 2000s and Witt in 2010s on the capitalisms of Japan and South Korea, this research draws several meaningful implications for further CC studies. First, Whitley’s national business systems are the most convincing theory among different CC approaches in analysing and comparing East Asian capitalisms. Second, national business system is still important in comparison of competitive advantage within a same industrial sector across countries, because it significantly affects the performance and outcome of sub-sectoral system despite the existence of different characteristics across industries.