Significance of Development Stage Theory for Explaining Industrial Growth Pattern between Asian NICs and Selected Advanced Economies

The East Asian miracle was real. Prior to the 1997 economic and currency crises, Asian NICs — Hong Kong, Korea, Singapore and Taiwan — achieved remarkable annual GDP growth. In these countries the overall economic performance was significantly determined by the industrial development triggered by changes in domestic demand, increases in FDI, intensive innovation efforts of indigenous firms, and export expansion of manufactured goods. Furthermore, fast economic growth and active state interventions like those adopted in most NICs were accompanied by various structural changes in the industrial sector. This study examines the applicability of the development stage theory for explaining the growth dynamics of industrial production in Asian NICs for the period 1980-95 and compares their specialisation pattern with that of more advanced economies like Japan, West Germany and the US.