Does Firm Agglomeration Improve Production Efficiency? : A Korean Experience
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초록
This study uses Korean data to empirically examine if agglomeration of firms pays off. In this article, we have used aggregated firm data collected from Industrial Complex survey in 2003 Industrial Census. Our empirical results offer evidence that there exist productivity gains in the geographic agglomeration of firms. Geographically 10% higher concentration of firms is expected to increase production by 0.64% overall. Following discussions on the effect of urbanization economies in related literature, we also check if the urbanization effect occurs. Our estimation result confirms existence of the urbanization effect in Korea. It is estimated that 10% increase in total number of firms in whole city raises productivity of firms within the city by 0.52%. Our analysis also presents which industry would be the biggest beneficiary of the agglomeration. Our estimation shows that the industry of chemicals & chemical products will gain the most from co-location. Industries of woods & woods products, refined petroleum products, and non-metallic mineral products are also expected to generate mutually beneficial externalities.
Abstract
This study uses Korean data to empirically examine if agglomeration of firms pays off. In this article, we have used aggregated firm data collected from Industrial Complex survey in 2003 Industrial Census. Our empirical results offer evidence that there exist productivity gains in the geographic agglomeration of firms. Geographically 10% higher concentration of firms is expected to increase production by 0.64% overall. Following discussions on the effect of urbanization economies in related literature, we also check if the urbanization effect occurs. Our estimation result confirms existence of the urbanization effect in Korea. It is estimated that 10% increase in total number of firms in whole city raises productivity of firms within the city by 0.52%. Our analysis also presents which industry would be the biggest beneficiary of the agglomeration. Our estimation shows that the industry of chemicals & chemical products will gain the most from co-location. Industries of woods & woods products, refined petroleum products, and non-metallic mineral products are also expected to generate mutually beneficial externalities.
참고문헌 (18)
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