A Factor Analytic Model of Economic Growth Basing on Domestic and Foreign Resource and a Positive Study of Korean Economy

The most popular and traditional method to analyze the source of economic growth is created by Robert. M. Solow, but it has some localizations and is not very precise in some sense. In this paper, we will classify all sources of economic growth into domestic part and foreign part. Gross domestic products (GDP) growth is decomposed into labor input, domestic capital formation, imported foreign capital formation, and total factor productivity (TFP) growth. TFP growth is again divided into scale economies, capital utilization, human capital, domestic research and development (R&D) effort, and imported foreign technology. In this way, foreign resources include imported foreign capital formation and foreign technology. By model and demonstration, we analyze the impact of foreign resource to an economy, and the contribution of each factor (especially technological progress) to economic growth.