This contrasts with
their results for OECD countries, using the same approach, where there remains a residual
attributable to technical change. Krugman (1994), relying on the Kim and Lau study, argues
that the rapid growth in East Asian economies is only the result of massive capital
investment, high saving rates, increases in educational levels, and other “astonishingly”
mobilized resources. Here we re-examine this extreme conclusion6.
While the Kim-Lau methodology has some advantages, including not imposing
constant returns to scale7, it also involved lumping together the four "tigers". Young's (1992,
1995) results, using the growth accounting approach, suggest that this may not be warranted.