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Abstract
This paper is focused on analyzing the effect of municipal consolidation on urban manufacturing productivity in Korea. The results indicated that the investments and government expenditures of the consolidated cities have higher impacts on urban labor productivities by generating agglomeration and network economies. Road expansion, on the other hand, generates a negative effect on productivity due to wider market openness from the improvement of spatial accessibility. Urban labor productivity can be maximized when the population size of the consolidated city is between 300,000 and 400,000 people. This size can be applied to setting up a guideline for reorganizing regional administrative units in Korea.
