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Agglomeration, productivity, and high-growth firms in the manufacturing sector of South Korea

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  • Myoungsub Choi
  • Taelim Choi

Abstract

Previous empirical studies have highlighted the significant contribution of a small fraction of high-growth firms to job creation in many countries. As a result, local economic development policy has promoted the creation of high-growth firms. Despite the impact of high-growth firms on local employment, few studies have examined the spatial aspect of such firms on a regional scale. This study focuses on the relationship among agglomerations, productivity, and high employment growth in the manufacturing sector of South Korea. Our analysis provides empirical evidence for the mutually positive impact of agglomeration, productivity, and high employment growth in the manufacturing sector of this nation. Results indicate that high-growth firms tend to be more productive, and firms with higher productivity are more likely to experience strong growth in employment. Furthermore, localization, concentration of firms within one industry, reinforces these positive relationships by enhancing productivity that subsequently leads to high employment growth. Our findings imply that spatial policy may play a complementary role in nurturing a greater number of firms with a potential for strong growth in employment.

Suggested Citation

  • Myoungsub Choi & Taelim Choi, 2017. "Agglomeration, productivity, and high-growth firms in the manufacturing sector of South Korea," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 21(1), pages 58-71, January.
  • Handle: RePEc:taf:rjusxx:v:21:y:2017:i:1:p:58-71
    DOI: 10.1080/12265934.2016.1195278
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    References listed on IDEAS

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    Cited by:

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    2. Taelim Choi & Jeong-Il Park, 2020. "Related variety and productivity in the environmental industry: establishment-level evidence from South Korea," Letters in Spatial and Resource Sciences, Springer, vol. 13(3), pages 287-295, December.
    3. Kenichi Kashiwagi & Erina Iwasaki, 2020. "Effect of agglomeration on technical efficiency of small and medium‐sized garment firms in Egypt," African Development Review, African Development Bank, vol. 32(1), pages 14-26, March.

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