Journal of Applied Input-Output Analysis, Vol.1, No.l, 1992

A DPG (Deviation from Proportional Growth) Analysis of
the Japanese, Korean and Taiwanese Economies1
By

Chen Kuang-hui* and Kiyoshi Fujikawa**

Abstract

A version of DPG analysis, a method to identify quantitatively the pattern of growth in terms of"Deviations from Proportional Growth," is presented and applied to the I-O data of Japan, Korea
and Taiwan. The presented version includes an original definition of DPGs and the use of"normalized DPGs," the aim of which is to supply clearer outputs of the method. The analysisof the three economies contrasts the export-led Korean and Taiwanese growth with the Japanese
growth, where the contribution of investment demand and intermediate demand had long beensignificant.

1. Introduction
The purpose of this article is to present a method to explain quantitatively the causes of observedchange in the sector composition of production and apply it to the data of Japan, Korea andTaiwan in order to compare their patterns of growth.
Our method has its origin in Chenery (1960), who intended to give a systematic explanation to

the empirical fact that there exists a certain pattern of change in the composition of output, a factwhich was pointed out in the works of Clark, Kuznets and Rostow.2 Chenery's approach was tocombine several factors that had been known as the causes of that pattern, an example of which
was the change of household consumption investigated by Hauthakker (1957). He presented amethod to introduce a concept, "Deviation from Proportional Growth," as a measure of thedegree of change in output composition and to break it down into several factors, a method which
we refer to as DPG analysis.

Although Chenery applied his DPG analysis originally to "the normal production levels of
industries" calculated from data of some 50 countries, various versions have later been developed

and applied as methods to identify the pattern of growth of a specific economy.3 We can findthose versions applied to the data of Japan in the studies of Chenery, Shishido and Watanabe(1962), and Watanabe and Suruga (1977); of Korea in Aoki and Inada (1980), and Han (1989);
and of Taiwan and Japan in Chen and Fujikawa (1987 and 1989). Variation of the methods,
however, does not allow a consistent comparison between their results.

In this article, we apply our version to these three economies. Our analysis covers the period
1914-85 for Japan, 1963-85 for Korea and 1966-84 for Taiwan. We believe that it is quite
Manuscript received December 17, 1991. Revised February 20, 1992.

* Junior College Course of Economics, Shiga University.
**Osaka University of Economics, and the International Centre for the Study of East Asian Development, Kitakyushu.

'We would like to thank Mitsuo Saito, Shuntaro Shishido and an anonymous referee, as well as Takahiro Akita,
Schunichi Hiraki and participants at the 1991 meeting of the Japan Section of the Regional Science Association International for their invaluable comments and discussions.
2For example, see Clark, 1957; Kuznets, 1966; and Rostow, 1960.

3We made a brief survey of those methods in Chen and Fujikawa, 1989.

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Journal of Applied Input-Output Analysis, Vol.1, No.l, 1992

meaningful to make a comparison of growth patterns between Japan, including the pre-war
period, and the Newly Industrializing Economies in Asia.

We set forth our method in the next section. We make an analysis of the Japanese, Korean andTaiwanese economies in Section 3. Section 4 contains concluding remarks.

2. Method
DPG analysis measures the degree of change in sector composition of production in terms of theconcept of deviations from proportional growth. The deviations, which we call DPGs, can be
defined as:
SX = Xt+1-XXt

(1)

where

Xt, Xt+i: the column vectors each element of which is gross production of each sector in time
period t and t + 1

X : the scalar which represents the (weighted) average ratio of expansion of production, obtainedby the division of the total of the gross production in period t + 1 by that of period t
5X, a vector of DPGs, is zero if all the sectors have expanded at the average ratio, X, whichcorresponds to the situation of proportional growth. Each element of 5X is DPG of each sector.
It is positive when a sector has grown faster than the average, zero when the ratio of expansionof the sector is equal to X, and negative when it is less than X. Hence, its sign shows whether a sector
has increased its output share or not, and its absolute value depends on the actual growth rate andthe production level of the sector. The DPGs thus defined are analogous to deviations around themean. The sum of them therefore is zero.4
DPG analysis decomposes 5X into several factors. Our formula for the decomposition is basedon the following balance equation:

Xt = (ii* - MAt) * AiXt + (I - Mct) Q + (I - MIft) Ift + Jt + Et

(2)

where
ii': the matrix all elements of which are 1*:

Hadamard product of matrices5At:

the matrix of input coefficients

MAt : the matrix the (i,j)th element of which is the import coefficient of the (i,j)th intermediatetransaction

I:the identity matrix

Q, Ift:the vectors of final consumption and investment

Mct, MIft: the diagonal matrices the (i,i) th elements of which are the import coefficients of thei-th consumption and the i-th investment
Jt, Et: the vectors of increases in stocks and of exports of domestic products

4These characteristics of the DPG resulted from our X in equation (1) being the average ratio of expansion of industries,
instead of which the ratio of expansion of per capita income, total domestic demand, GNP or GDP has often been chosen.

5If A = (ay) and B = (bij), then their Hadamard product is A*B = (aybij). See Rao 1973, 30.

A DPG Analysis of the Japanese, Korean and Taiwanese Economies

73

The first term of the equation represents intermediate demand for domestic industries. The
second term and the third represent consumption and investment demand. The fourth and the fifth
are increases in stocks and exports of domestic goods and services. The equation states that the
production of each sector is equal to the sum of demand for domestic products.

Solving equation (2) for Xt gives:

X, = [I - (ii' - MAt) * AJ " * [(I - Mct) Ct + (I - MIft) Ift + Jt + EJ

(3)It expresses that production is a function of final demand vectors, Q, Ift, Jt and Et, with importcoefficient matrices and an input coefficient matrix, MAt, Mct, MIft and At, working as para
meters.6 We can now attribute a change in production to changes in those vectors and/or para
meter matrices, to which changes we can attribute the DPGs of production as well.
Substituting (3) into (1) yields the following decomposition formula:(I-MIft+i) 5If+Bt+i <5J + Bt + 1 <5E

t + , (Mct-Mct + 1)\Ct + Bt + 1 (MIft-MIft + 1)XIft + Bt + 1 (MAt-MAt+1) *At\Xt+ Bl+1 (iiJ - MAt+,) * (A, +1 - At) X X,
(4)
where

<5If=Ift + ,-XIft
6J = Jt +1 ~"X Jt
SE = Et +1 — X Et

The first term represents the DPGs of production attributasble to the DPGs of consumption
demand, 6 C, the i-th element of which is positive, zero, and negative when the i-th demand has
expanded at a ratio greater than, equal to and smaller than X. The second, third, and fourth terms

are the analogous deviations of production resulted from the DPGs of investment demand, 5 If,
the DPGs of increases in stock, 6 J, and of exports, 5 E. The fifth, sixth and seventh terms

represent the effects produced by changes in import coefficients of consumption, Mct - Mct + i,of investment, MIft - MIft+i, and of intermediate demand, MAt - MAt+i. The last term is DPGs
attributable to a change in input-output coefficients, At + i - At.
Although equation (4) is the basic formula for our DPG analysis, it requires rather detailed
information on imports, information which is not always available. We prepared a revised modelthat is applicable even if data are less detailed. We replaced equations (2), (3) and (4) with thefollowing:

Xt = (I - Mt) (AtXt + Q + Ift + Jt) + Et

(5)

where

Mt: the diagonal matrix the (i,i)th element of which is the import coefficient of the i-th domestic
6This is an input-output model which treats imports as endogenous variables. There are alternative models where imports
are exogenous variables and production is a function of final demand vectors and import vector(s), with an input
coefficients matrix working as parameters. An example of these alternatives can be found in Chenery, Shishido, and
Watanabe, 1962. The reasons why we choose an endogenous imports model are that we assume imports are strongly relatedwith domestic demands, that the import coefficients would provide better indices of degree of import dependency thanimports levels, and that models of this type seem to be used more often in recent studies.

74

Journal of Applied Input-Output Analysis, Vol.1, No.l, 1992

demand, which is the total of intermediate, consumption, investment demand and an increasein stocks

Jt:

the vector representing increases in stocks including imported goods(6)t = [I-(I-Mt)At]-Mt+1) b If

= Bt+, (I-Mt++ Bt+1(I-Mt+1)5+ Bt+1 (Mt-Mt+1)\(AtXt + Ct +(7)

+ Bt+1(I-Mt+1)(At+1-At)\Xt

where
1-1

This revised model decomposes b X into six factors, the effects of the deviations of final demand,b C, b If, b J and b E, and the effects of changes in import coefficients and input coefficients,
Mt-Mt+i and At+i-At.

Our decomposition analysis includes four periods, 1914-54, 1955-65, 1965-75 and 1975-85, forJapan; two periods, 1963-75 and 1975-85, for Korea; and two periods, 1966-76 and 1976-84, for

Taiwan. We applied equation (7) for Japan in the period 1914-54 and (4) for all the others.7 Data
were obtained from the input-output tables for the beginning and the ending year of each period.

We aggregated the original tables, which were composed of about 50-120 sectors of production,
into 20- to 30-sector tables and then converted them into ones expressed in constant prices. See
Appendix for more detailed information on the data.
Table 1 illustrates the result of the decomposition analysis. The first column shows the DPG ofeach sector, the number of which is reduced by re-aggregating the result obtained from the dataof the 20- to 30- sector tables.8 The remaining columns show the sources of each DPG. The
formula applied here was equation (7) and thereby the sources included deviations of four
categories of final demand, consumption, investment, increases in stocks and exports; andchanges in two categories of coefficients, import coefficients and input coefficients. However, theeffect regarding increases in stocks is, and will be in the analysis below, excluded. This is because
we are concerned with DPGs over a period longer than the accepted length of the cycle of inventorychange, about three years.
Table 1Illustration of the Result of DPG Decomposition
DPG

Agriculture, Forestry, & Fisheries
MiningChemicals
Metals
Machinery
Other Manufacturing
Construction
Trade
Others
Total

C

If

-1435.7-143.7544.91119.8-258.7231.4-197.7227.4-812.9

322.2

490.0

-443.10.0-2348.9

Change in Coef.

Deviation of
E

M

A

43.1

-152.1-287.5-527.8

-83.7

56.7

-46.4

-52.3

-1.3

-328.4

63.8

-28.4

493.9

288.0
170.1

351.2

-106.3

220.8
349.8

120.8
57.5
-388.0
-0.7

363.5
697.3

5.7

75.4

12.8

81.5

-43.4

25.5

429.7

-1562.1-4771.8

274.5-266.0

180.6

973.5

1548.3-746.7975.1

3342.5

60.2

154.3

197.7

1178.4

7We could not obtain input-output coefficients for Japan in 1914 and eliminated At in equation (7) by replacing At

Xt with Wt, the vector of the total intermediate demand in period t.
8See Tables A through H at the end of this article for sector classification.

A DPG Analysis of the Japanese, Korean and Taiwanese Economies

75

Table 1 indicates, in terms of DPG, the direction, degree, and the sources of change in thecomposition of output. This is the result for Japan in 1914-54 and the values are expressed inmillions of 1951 yen. As far as we are concerned with the relative degree of the change and therelative magnitude of the causes, however, they do not have to be measured by a specific money

unit. They can be divided by the sum of DPGs that are positive and then multiplied by 100,9
thereby being normalized so that the sum of positive DPGs equals 100 and that of negative DPGs
equals - 100, as is shown in Table 2 in the next section. This normalization would make the table
clearer and the comparison between periods and economies easier. Every table presented in thenext section shows such a normalized result.

3. Major Findings
3.1. The Japanese Economy

The results of our DPG decomposition for Japan in the periods 1914-54, 1955-65, 1965-75 and1975-85 are given in Tables 2, 3, 4 and 5.
3.1.(1) 1914-54

DPGs in Table 2 indicate that manufacturing, trade and construction increased their output sharesand that mining, "others," agriculture, forestry and fisheries decreased their shares. Manufactur
ing and construction accounted for 83.3% of the positive deviations. Japan in this period is thus
characterized by its industrialization.

The last row of the table shows that change in input coefficients played the most significant partin producting positive deviations. Every sector received its benefit except agriculture, forestry,
fishery and mining. We assume this is because the development of various industrial sectors in thisperiod, some of which might be "newborn," caused intermediate demand to shift toward a
direction in favor of those industries.

The deviation of investment was the second important factor that produced positive deviations.
Among three categories of final demand in Table 2, only investment was a factor where the total

Table 2 DPG Decomposition for Japan, 1914-54

Urb

Agriculture, Forestry, & Fisheries-80.0

Change in Coef.

Deviation of

nnp

C

If

E

M

A

-48.9

1.5

-5.2

-9.8

-18.0

Mining

-4.9

-2.9

1.9

-1.6

-1.8

—

Chemicals

18.6

-11.2

2.2

-1.0

16.8

12.4

Metals

23.8

38.1

-8.8

9.8

4.1

12.0

Machinery

7.9

6.7

5.8

2.0

2.1

5.3

Other Manufacturing

7.7

-27.7

7.5

-13.2

6.7

40.1

Construction

11.0

-3.6

11.9

—

0.2

2.6

Trade

16.7

0.4

2.8

-1.5

0.9

14.6

Others

-15.1

-53.2

9.3

-9.1

6.2

33.2

Total

0.0

-162.5

52.7

-25.4

33.2

113.9

Note: The annual growth rates of GDP, consumption, investment and exports, calculated from I-O data for 1914 and 1954at 1951 constant prices, are 2.8%, 2.2%, 5.2% and 2.6% respectively.

9The sum of DPGs that are positive is equal to the absolute sum of DPGs that are negative, since the sum of DPGs,
according to our definition, is equal to zero.

76

Journal of Applied Input-Output Analysis, Vol.1, No.l, 1992

contribution was positive. The reason is that only investment demand, as the note at the end of
the table suggests, expanded at a ratio greater than X, the average ratio of output expansion. Most

elements of b If = Ift+i -X Ift in equation (4) could thus have positive values and produce positive
DPGs. Consumption and exports, on the contrary, could not expand at ratios sufficient to maketheir total contributions positive.

The third factor the total effect of which was positive was change in import coefficients, a factor
the positive effect of which suggests import substitution took place. Import substitution explained
a fair part of the positive DPGs of chemicals, metals and "other manufacturing."
3.1.(2) 1955-65

Table 3 indicates that "other manufacturing" and trade, the DPGs of which sectors had been

positive in the previous period, did not increase their shares. The sectors the deviations of whichwere positive were chemicals, metals, machinery and construction. Japan in this period was thus
characterized by the expansion of heavy industries.

A change is also observed in the sources of DPGs. Change in input coefficients, having been

the most significant source in the previous period and still explaining a fair part of positive
deviations of chemicals and machinery, could not favor so many sectors as before and its total
effect turned negative. Change in import coefficients, a source which had been the third
important, was no longer a considerable cause of industrial expansion, suggesting that importsubstitution was almost completed.

The factors the total effects of which were positive in this period were the deviations ofinvestment and exports. As the note at the end of Table 3 suggests, their expansion wasconsiderably large so that not a few sectors could receive its linkage effects. The table shows usthat the growth of investment benefited all sectors, among which machinery and construction wereconspicuous, and that exports benefited machinery, metals and chemicals. It might seem strangethat the total effect of export growth was much less than that of investment growth, whereas thedifference between their rates of growth was only a little. Our reasoning for this is that the exports
were smaller in amount than the investment.

3.1.(3) 1965-75
As DPGs shown in Table 4 indicate, Japanese pattern of growth in this period was characterized by

Table 3 DPG decomposition for Japan, 1955-65
Deviation ofAgriculture, Forestry, & Fisheries-38.1

Change in Coef.

C

If

E

-5.7

1.5

-0.4

Mc

Mlf

MA

-0.8

—

—

-28.8

—

-2.4

-1.0

—

-0.8

11.1

A

Mining

-2.4

0.1

0.7

—

—

Chemicals

18.7

3.7

2.3

2.3

-0.1

Metals

18.0

3.4

8.5

6.8

—

0.1

-2.2

1.1

Machinery

56.4

8.0

22.4

9.7

—

0.2

-0.1

16.6

Other Manufacturing

-1.8

4.7

7.9

-2.1

-0.5

—

-1.7

-10.2

7.3

-0.6

13.9

-0.8

—

—

—

Trade

-3.8

-4.2

4.7

-1.2

—

—

-0.1

-3.0

Others

-53.9

-7.1

6.4

-3.7

-0.3

—

-0.2

-49.1

Total

0.0

2.2

68.5

10.5

-1.7

0.3

-7.5

-68.5

Construction-5.1

Note: The annual growth rates of GNP, consumption, investment and exports, calculated from national accounts data for1955 and 1965 at 1960 constant prices, are 9.7% , 8.0%, 15.0% and 14.4% resp<actively.

A DPG Analysis of the Japanese, Korean and Taiwanese Economies

77

Table 4 DPG Decomposition for Japan, 1965-75

DPG

Deviation of

Change in Coef.

Mc

Mlf

MA

A

Agriculture, Forestry, & Fisheries

-19.3

-10.6

-1.0

-0.9

-0.7

—

-3.3

-1.8

MiningChemicals
Metals
Machinery

-6.0
—
10.6
29.2

0.1
-1.3
-0.4
2.3

-1.2
-2.5
-7.8
2.9

0.1
2.6
10.2
17.1

-0.4
-1.1
-0.3
-0.8

—
—
—
0.2

-3.1
—
0.7
-0.3

-1.4
3.2
7.8
9.1

Other Manufacturing

-30.4

-19.0

-8.7

-3.5

-2.4

-0.1

-2.8

9.6

Construction

-44.3

0.2

-39.4

0.1

—

—

—

-5.2

Trade

2.2

-2.2

-1.7

0.9

-0.3

—

-0.3

6.2

Finance

15.5

0.8

-1.9

1.0

-0.3

—

-0.5

16.7

C

If

LJ

Public Services

10.7

9.3

-0.2

0.2

—

—

—

1.3

Others

31.9

15.0

-6.3

3.7

-1.0

—

-1.5

22.8

Total

0.0

-5.8

-67.7

31.4

-7.4

0.2

-11.1

68.3

Note: The annual growth rates of GNP, consumption, investment and exports were 11.3%, 8.3%, 17.5% and 16.1%
respectively in the first half of this period and dropped to 4.7%, 5.5%, 3.3% and 11.3% in the second half. The figures
were calculated from national accounts data for 1965, 1970 and 1975 at 1970 constant prices.

the continuing expansion of heavy industries and the newly observed enlargement of services
including "others," although chemicals, a sector that belongs to heavy industries, no longer
increased its share.

Conspicuous is that the deviation of investment, which had been a significant cause of positive
DPGs, turned to be a negative factor in this decade. Investment slumped after the quadrupling ofoil prices in 1973 and could not continue to lead the growth of industries.
Significant sources of positive DPGs in this decade were change in input coefficients and thedeviation of exports. The former was an important source of the positive deviations of "others"

and finance, and the latter played a considerable role in the expansion of machinery and metals.
The former fact suggests that a change took place in the pattern of intermediate demandnecessitating more services than before.

The table shows us that the enlargement of service sectors was also supported by the deviationof consumption. A change in favor of services seems to have taken place in the pattern ofconsumption as well.

Change in import coefficients continued to be a factor the total effect of which was negative,

suggesting that imports had been increasing. We assume this was a result of the fact that the
expansion of exports made more imports possible.
3.1.(4) 1975-85

In this decade, expansion of machinery sector accounted for almost 70% of the positive DPGs andthat of trade, finance and public services accounted for the rest, as shown in Table 5.

The factors the total effects of which were positive were the deviation of exports and that ofconsumption. The former, the total effect of which was more than twice as large as that of the latter,
was more significant for machinery and the latter was rather more significant for services.
Conspicuous in this decade are thus the export-led expansion of the machinery sector and theconsumption-led expansion of services, with the former accounting for 33.0% and the latteraccounting for, when "others" is excluded from services, 19.8% of the positive deviations.10 The
l0The figure 19.8 is obtained by the addition of 11.8, 6.1 and 1.9, DPGs of services, from which "others" is excluded,
explained by the deviation of consumption.

A DPG Analysis of the Japanese, Korean and Taiwanese Economies

79

The most significant source of this manufacturing expansion was the deviation of exports. The
table suggests that Korea exported a variety of manufactures and that the exports increased at aremarkably rapid rate. Almost every sector could benefit from it.

The second source of the manufacturing expansion was the deviation of investment. Although
being inferior to the exports, the growth of investment was considerably rapid and every sector could
receive its linkage effect.

The effects of change in import coefficients and change in input coefficients, which explained afair part of the positive deviations of chemicals, were not significant on the whole. The deviationof consumption could not have any positive effects.

There are some similarities between the Korean pattern of growth in this period and the Japanesepattern in 1914-54. Every sector of manufacturing increased its share and the deviation of invest

ment was a significant source. The difference is that exports played a remarkable role in the Koreancase, whereas the effects of change in input coefficients and import coefficients were significant inJapan.

3.2.(2) 1975-85

In this decade, there took place a change in the pattern of manufacturing expansion whereby
chemicals decreased its output share. However, manufacturing still accounted for a large part,
92.7%, of the positive DPGs, as shown in Table 7.

A change also took place in the sources of DPGs. The significance of investment and exports
decreased and the favorable effects of change in input coefficients and import coefficients incrased.
Our reasoning for the decreased significance of investment and exports is that they could not
expand as rapidly as before. Korea also experienced a recession in the decade following thequadrupling of oil prices in 1973, although the growth of the Korean economy was still rapid, forinstance, in comparison with Japan.

In spite of the recession, the Korean economy seems to have matured more than the previous

period. We can find increased significance of change in input coefficients and import coefficients

MA and Mlf, a situation which suggests intensified interindustry linkages and the progress ofimport substitution of intermediate and investment goods. The fact that the deviation of exports
favored heavy industries, which fact suggests that heavy manufactures increased their share in
Table 7 DPG Decomposition for Korea, 1975-85
Change in Coef

Deviation of
Urb

C

If

E

Mc

Mlf

MA

A

-59.9

-61.7

-0.8

-6.7

3.7

—

5.1

0.6

Mining

-5.4

-1.0

-0.2

0.8

—

—

-1.1

-1.9

Chemicals

-0.4

-13.7

-0.7

8.5

0.2

0.5

3.1

4.2

Metals

23.6

-1.2

-0.7

6.6

—

0.9

5.0

5.8

Machinery

50.1

1.6

5.8

23.5

0.1

6.7

1.3

12.1

26.2

Agriculture, Forestry, & Fisheries

19.0

-9.1

-1.0

-2.8

1.0

0.3

3.4

Construction

-10.2

-2.7

-10.2

0.4

—

0.1

0.1

2.2

Trade

-12.7

-9.7

-0.4

2.0

-0.4

0.4

-0.1

-4.9

0.9

Other Manufacturing

—

0.3

0.7

8.6

0.1

-0.4

—

—

0.2

-1.1

3.2

0.2

0.5

0.3

7.6

-9.6

45.0

4.4

9.8

17.7

60.7

7.3

-2.7

-0.4

-10.5

-10.5

—

Others

-0.8

-11.0

Total

0.0

-121.5

FinancePublic Services

Note: The annual growth rates of GDP, consumption, investment and exports, calculated from national accounts data for1975 and 1985 at 1980 constant prices, are 7.7%, 5.8%, 11.2% and 13.0% respectively.

80

Journal of Applied Input-Output Analysis, Vol.1, No.l, 1992

exports, also appears to support our view that the Korean economy was maturing.

Korean growth in the above two periods can be characterized by its rapidity and raised degreeof maturity. Although we can find these characteristics in the post-war growth of Japan until the
beginning of the 1970s, exports played a remarkable role in the case of Korea.
3.3. The Taiwanese Economy

The results for Taiwan in 1966-76 and 1976-84 are shown in Tables 8 and 9. We found several
similarities with the Korean pattern of growth, which also characterize the growth of Asian NIEs.
3.3.(1) 1966-76

Table 8 indicates that manufacturing expansion was also observed in Taiwan. It accounted for
92.4% of the positive DPGs.

Like the case of Korea, the most significant source of positive DPGs was the deviation of exports,
which expanded at a considerably rapid rate and benefited machinery, "other manufacturing" andchemicals, in particular. Although the change in input coefficients and the deviation of exports werealso positive factors, the former being the second source of the expansion of the expansion ofchemical and "other manufacturing" and the latter being significant for construction, theirsignificance on the whole was inferior to that of exports.

The manufacturing DPGs explained by the deviation of exports amounts to 80.0% of the positive
deviations. The export-led pattern of growth is quite obvious.
3.3(2) 1976-1984

In this period, there took place a change in the pattern of manufacturing expansion whereby "othermanufacturing" decreased its share. However, as much as 86.3% of the positive DPGs was still
attributable to the manufacturing sectors, as shown in Table 9.

A recession was also observed in Taiwan in this period. There was a considerable fall in the growth
rates of exports and investment, of which the fall of the latter was more considerable. Investment
became a negative source of DPGs.
In spite of the slowing down, exports could continue to be an outstanding cause of positive DPGs.
The export-led pattern of growth was still obvious.

Table 8 DPG Decomposition for Taiwan, 1966-76
Deviation of
LJrO

Change in Coef.

C

If

E

Mc

-50.1

-51.9

-0.7

-7.5

0.9

Mining

-8.2

-1.7

0.7

-0.3

—

Chemicals

22.5

-6.7

0.9

18.2

-0.3

9.8

-1.2

2.7

5.1

-0.1

Machinery

26.5

0.5

4.9

29.0

Other Manufacturing

33.6

-13.3

1.9

5.5

-1.3

-16.4

-7.7

Agriculture, Forestry, & Fisheries

MetalsConstruction
Trade

MA

A

-12.4

20.0

—

-1.8

-5.1

0.2

1.0

10.1

0.1

2.0

2.1

0.1

0.8

-1.0

2.8

27.7

1.0

0.5

-0.5

15.6

7.8

-1.5

-0.1

—

-0.1

0.7

-1.9

1.8

0.1

—

-0.2

-8.2

0.1

2.5

Mlf
—

2.2

-1.6

—

1.4

-0.2

—

Others

-25.4

-31.4

0.3

2.7

-2.0

0.1

-2.7

7.7

Total

0.0

-116.3

16.7

66.5

-0.6

1.8

-15.5

48.1

Finance

Note: The annual growth rates of GDP, consumption, investment and exports, calculated from national accounts data for1966 and 1976 at 1976^constant prices, are 9.8%, 7.6%, 15.0% and 20.2% respectively.

82

Journal of Applied Input-Output Analysis, Vol.1, No.l, 1992

Tables of Korea: Tables compiled by the Bank of Korea.

Tables of Taiwan: Tables compiled by Council for International Economic Cooperation andDevelopment, Executive Yuan (tables for 1966), Council for Economic Planning and Develop

ment, Executive Yuan (tables for 1976), and Directorate-General of Budget, Accounting andStatistics, Executive Yuan (tables for 1984).
B. Sources of Price Indexes

Except for Japanese tables for 1914 and 1954 being expressed in 1951 constant yen, all the original
tables are in current prices. We converted them into tables expressed in constant prices using
wholesale price indexes by commodity, consumer price indexes by commodity, and GDP deflators
and GNP deflators by product.
1. For the analysis of the Japanese economy, we prepared tables for 1955 and 1965 at 1965 yenlevel, tables for 1965 and 1975 at 1975 yen, and tables for 1975 and 1985 at 1985 yen. Priceindexes were obtained from the following sources:
Bank of Japan. Statistics Department. Price Indexes Annual. 1970 ed.

Research and Statistics Department. Price Indexes Annual. 1980 ed.
Research and Statistics Department. Commodities, Weights and Linked Indexes of1985 Base Wholesale Price Indexes. 1988.

Statistics Bureau of Prime Minister's Office. On the Revision of Consumer Price Indexes.
1965 ed.

Linked Indexes of 1975 Base Consumer Price Indexes. 1976.

Management and Coordination Agency. Statistics Bureau. Linked Indexes of 1985 Base
Consumer Price Indexes. 1987.

Economic Planning Agency. Annual Report on National Income Statistics. 1967 ed.
Annual Report on National Accounts. 1985 ed. and 1988 ed.
2. We compiled Korean tables for 1963 and 1975 in 1970 constant prices and tables for 1975 and1985 in 1980 prices. Price indexes were obtained from the following sources:
Bank of Korea. Economic Statistics Yearbook. 1976 ed., 1977 ed, and 1987 ed.
National Accounts. 1987 ed.

3. For the analysis of the Taiwanese economy, we prepared tables for 1966 and 1976 at 1976
constant N.T. dollars and tables for 1976 and 1984 at 1980 N.T. dollars, using the price indexes
obtained from the following sources:

Executive Yuan. Council for Economic Planning and Development. Taiwan Statistical Data
Book. 1981 ed. and 1987 ed.

Directorate-General of Budget, Accounting and Statistics. Statistical Yearbook of the
Republic of China. 1988 ed.

Directorate-General of Budget, Accounting and Statistics. National Income of the
Republic of China. 1982 ed. and 1988 ed.
References[1] Aoki, Koji, and Yoshihisa Inada (1980), "Factor Analysis of Industrialization in Korea: A Comparison
with the Japanese Pattern," Ajia Keizai Vol. 21, No. 5, pp.27-46 (in Japanese).
[2] Chen Kuang-hui, and Kiyoshi Fujikawa (1987), "An Analysis of 'Deviation from Proportional Growth'of the Taiwanese Economy," Sekai Keizai Hyoron Aug, pp.53-65 (in Japanese).
[3] Chen Kuang-hui, and Kiyoshi Fujikawa (1989), "A Note on DPG (Deviation from Proportional
Growth) Analysis and the Patterns of Industrial Development in Japan and Taiwan," /International]
University of] 7[apan] Annual Review Vol. 6, pp. 125-44 (in Japanese).

A DPG Analysis of the Japanese, Korean and Taiwanese Economies

83[4] Chenery, Hollis B (1960), "Patterns of Industrial Growth," American Economic Review Vol.
50, pp.624-54.

[5] Chenery, Hollis B., Shuntaro Shishido, and Tsunehiko Watanabe (1962), "The Pattern ofJapanese Growth, 1914-1954," Econometrica Vol. 30, pp.98-139.

[6] Clark, Colin (1957), The Condition of Economic Progress, 3rd ed., London: Macmillan.

[7] Han Bock-sang (1989), "Factor Analysis of Economic Growth and Industrial Change in
Korea, 1973-83," Ajia Keizai Vol. 30 No. 7, pp.25-38 (in Japanese).

[8] Hauthakker, H. S. (1957), "An International Comparison of Household Expenditure
Pattern, Commemorating the Centenary of Engel's law," Econometrica Vol. 25,pp.532-51.
[9] Kuznets, Simon (1966), Modern Economic Growth: Rate, Structure and Spread, New Haven:
Yale UP.

[10] Rao, C. Radhakrishna (1973), Linear Statistical Inference and Its Application, New York:
Wiley.

[11] Rostow, W. W. (1960), The Stages of Economic Growth: A Non-Communist Manifesto,
London: Cambridge UP.

[12] Watanabe, Tsunehiko, and Terukazu Suruga (1977), "Methods for Analyzing the Sources ofIndustrial Growth and Postwar Japan's Experience," Osaka Economic Papers [Osaka
University] Vol. 26 No. 3-4, pp. 154-66 (in Japanese).

84

Journal of Applied Input-Output Analysis

Table A Sector Classification for Japan, 1914-54
1

Agriculture, Forestry, & Fisheries

Agriculture, Forestry, & Fisheries

2MiningOil and Coal

3

Chemicals

4

Metals5

Machinery

Other Mining
Chemicals
Oil & Coal Products
Metals
MachineryTransportation Machinery

6

Other Manufacturing

Food Products
Fiber and Leather
Wood Products
Paper Products

Printing & Publishing
Rubber Products

Non-Metallic Mineral Products
Other Manufacturing
7

Construction

Construction

8

Trade

Trade

9

OthersElectric, Gas, & Water Supply
Real EstateTransportation & Communication
Services
OthersTable B Sector Classification for Japan, 1955-65
Agriculture, Forestry, & Fisheriesw

1

Agriculture, Forestry, & Fisheries

2MiningMiningw

3

Chemicals

Chemical Productsw

4

MetalsOil & Coal Productsw
Steelw

Non-Ferrous Metalsw
Metal Productsw
5

Machinery

Machineryw

6

Other Manufacturing

Food Productsw
Fiber Productsw
Wood Productsw
Paper Productsw
Non-Metallic Mineral Productsw
Other Manufacturingw

7

Construction

Construction0

8

Trade

Trade"

9

OthersElectric, Gas, & Water Supply0
Transportation, Communication, & Warehousing0
Real Estate0

Others0
Corresponding index in wholesale price index was used as deflator.
Corresponding index in consumer price index was used as deflator.
nGNP deflator was used to deflate its production.

A DPG Analysis of the Japanese, Korean and Taiwanese Economies

Table C Sector Classification for Japan, 1965-75
1Agriculture, Forestry, & Fisheries

Agriculture, Forestry, & Fisheriesw

2 Mining

Miningw

3 Chemicals

Chemical Productsw
Oil & Coal Productsw

4 Metals

Steelw
Non-Ferrous Metalsw

Metal productsw
5 Machinery

General Machinery & Precision Apparatus'"
Transportation Machineryw

6 Other Manufacturing

Food Productsw
Fiber Productsw
Wood Productsw
Paper Productsw
Non-Metallic Mineral Productsw
Other Manufacturingw

7 Construction

Construction0

8 TradeTradedBanking & lnsuranced

9 Finance

Real Estate0
10 Public Services
11

OthersPublic Servicesd
Electric, Gas, & Water Supplyw
Transportation, Communication, & Warehousing0

Othersd""Corresponding index in wholesale price index was used as deflator.
Corresponding index in consumer price index was used as deflator.

dGDP deflator was used to deflate its production.

Table D Sector Classification for Japan, 1975-85
1Agriculture, Forestry, & Fisheries

Agriculture, Forestry, & Fisheries'"

2 Mining

Miningw

3 Chemicals

Chemical Products*
Oil & Coal Products*

4 Metals

Steelw
Non-Ferrous Metalsw
Metal Products*

5 Machinery

General Machinery*
Electric Machinery*Transportation Machinery*Precision Apparatus*
6 Other Manufacturing

Food Products*
Fiber Products*

Wood Products*
Paper Products*

Non-Metallic Mineral Products*
Other Manufacturing*

7 Construction

Construction0

8 TradeTradedBanking & lnsuranced

9 Finance

Real Estate0

10 Public Services
11

OthersPublic Servicesd
Electric, Gas, & Water Supply*
Transportation, Communication, & Warehousing0

Othersd
Corresponding index in wholesale price index was used as deflator.
Corresponding index in consumer price index was used as deflator.

dGDP deflator was used to deflate its production.

85

86

Journal of Applied Input-Output Analysis

Table E Sector Classification for Korea, 1963-75
1Agriculture, Forestry, & Fisheries

2 Mining
3 Chemicals

4 Metals
5 Machinery
6 Other Manufacturing

7 Construction
8 Trade9 Finance
10 Others

Agriculture (including Rice Milling)w
Fisheryw
Forestryw
Miningw
Rubber Productsw
Chemical Productsw
Oil & Coal Productsw
Metal Productsw
Machinery"7
Food Productsw
Beverage and Tobaccow
Fibersw
Texile Productsw
Leather Productsw
Wood Productsw
Paper Productsw
Printing & Publishingw
Non-Metallic Mineral Productsw
Other Manufacturing*
Construction"
Trade"
Banking, Insurance, & Real Estate"
Electric, Gas, & Water Supply"
Transportation, Communication, & Warehousing"
Others"Corresponding index in wholesale price index was used as deflator.
"GNP deflator was used to deflate its production.

Table F Sector Classification for Korea, 1975-85
1Agriculture, Forestry, & Fisheries

2 Mining

3 Chemicals

4 Metals
5 Machinery

6 Other Manufacturing

Agriculture and Live Stockw
Fisheries™
Forestryw
Miningw
Rubber Productsw
Chemical Productsw
Oil & Coal Productsw
Metal productsw
General Machineryw
Electric Machineryw
Transportation Machineryw
Precision Apparatusw
Food Productsw
Beveragew
Tobaccow
Fibersw
Textile Productsw

Leather Productsw
Wood Productsw
Pulp & Paper Productsw
Printing & Publishingw

Non-Metallic Mineral Productsw
Other Manufacturingw
7
8
9
10
11

Construction
Trade, Restaurants & Hotels
FinancePublic Services
OthersConstructiond
Trade, Restaurants & Hotelsd
Banking, Insurance, & Real EstatedPublic Servicesd
Electric, Gas, & Water Supplyd
Transportation, Communication, & Warehousing"1
Othersd""Corresponding index in wholesale price index was used as deflator.

dGDP deflator was used to deflate its production.

A DPG Analysis of the Japanese, Korean and Taiwanese Economies

Table G Sector Classification for Taiwan, 1966-76
1

Agriculture, Forestry, & Fisheries

2 Mining
3 Chemicals

4 Metals
5 Machinery

6 Other Manufacturing

Agriculture (including Rice Milling)w
Live Stockw

Fisheries'"
Forestryw
Miningw
Rubber and Plastic Productsw
Chemical Productsw
Metal Productsw
General Machinery & Precision Apparatusw
Electric Machineryw
Transportation Machineryw
Food Productsw
Beverage & Tobaccow
Textile Productsw
Leather Productsw
Wood Productsw
Paper Productsw
Non-Metallic Mineral Productsw
Other Manufacturing"7

7 Construction

8 Trade9 Finance
10 Others

Construction
TradedBanking & lnsuranced
Electric, Gas, & Water Supplyw

Transportation, Communication, & Warehousingd
Othersd

Corresponding index in wholesale price index was used as deflator.
dGDP deflator was used to deflate its production.

Table H Sector Classification for Taiwan, 1976-84
1

Agriculture, Forestry, & Fisheries

Agriculture"

Live Stockw
Fishery*
Forestryw
2 Mining

3 Chemicals

4 Metals
5 Machinery

6 Other Manufacturing

Miningw
Rubber & Plastic Productsw

Basic Chemical Productsw
Final Chemical Productsw
Primary Metalsw
Metal Productsw
General Machineryw
Electric Machineryw
Transportation Machineryw
Precision Apparatusw
Food Productsw
Beverage & Tobaccow
Textile Productsw
Leather Productsw
Wood Productsw
Paper Productsw
Non-Metallic Mineral Productsw
Other Manufacturing"

7 Construction

8 Trade, Restaurants & Hotels
9 Finance
10 Public Administration

11

OthersConstructiond

Trade, Restaurants and Hotelsd
Banking, Insurance, & Real EstatedPublic Administration

Electric, Gas, & Water Supplyd
Transportation, Communication, & Warehousing01
Othersd

Corresponding index in wholesale price index was used as deflator.
dGDP deflator was used to deflate its production.

87