The Effect of Spatial Structure and Dynamic Externalities on Local Growth in Seoul Metropolitan Area

Abstract

The objective this study is to explain the effect of dynamic externalities and spatial structure on urban growth through small-scale unit analysis. Empirical models measure the degree of specialisation, diversity, and competition and the effect in Seoul Metropolitan Area (SMA). Positive and negative agglomeration effects occur simultaneously in sub-centers depending on the industrial type. Decentralisation occurs because of the manufacturing industry, whereas the service industry remains influential at the urban center. Dynamic externalities at sub-center in SMA show similar patterns in most industries. Lower growth in highly specialised industries and high growth in more diversified industries.

本研究试图通过小规模单位分析，解释动态外部性和空间结构对城市发展的影响。通过实证模型测量专业化、多样化和竞争的程度及其对首尔大市区的影响。由于产业类型不同，次级中心的效应正负兼有。制造业出现了分散化，而服务业仍然主要集中在城市中心。首尔大市区次级中心出现的动态外部性显示出与大多数行业相似的规律。高度专业化的行业增长较低，而较为多样化的行业出现高增长。

Keywords:

• Agglomeration economies
• spatial structure
• dynamic externalities
• local growth

Notes

1. Previous studies that analysed cities in Korea mostly used the z-score of 0.8 or greater as the criterion to select the sub-center. This study used a stricter criterion of a z-score of 1 or greater. The relative value for employment cut-offs method is used in this study rather than the absolute value used in most other studies. Setting a common value is difficult because four types of industries are used. Therefore, 1% or more of the total employment is used as the cut-offs value as in Muñiz et al. (2008)

2. The HRSR is a method used to hierarchically divide Dis_sub,i and and put all variables into each hierarchy. The final variables are selected by removing statistically insignificant variables at each hierarchical level.

3. OECD’s Technology and Industry Outlook and the eighth and nineth Korea Standard Industrial Classification (KSIC) are used to classify knowledge- and non-knowledge-based manufacturing and services. The KSIC system is presented in the Appendix.