Econometric study on the technology gap between Korea and Japan: The case of the general machinery and electrical and electronic industries

This article presents an econometric model relating to the technological development problem of a technologically less developed country when there is a technology transfer from the leader (Japan) to the follower (Korea) nation. By developing a sensitivity analysis of the follower's development speed, the article seeks to determine the most effective means of improving the technological level of the follower nation. The alternatives of independent technological development and the importation of advanced technology from the leader nation are considered. The results of the study indicate that it is more effective for the follower to assimilate, modify, and localize the leader's technologies. The general machinery industry and the electrical and electronic industry are examined.