Employment Distribution of Establishments in Industrial Complexes and the Economic Performance

This paper empirically analyzes how the economic performance of industrial complexes differs depending on the employment distribution of plants in industrial complexes, using the Korea Industrial Complex Corporation’s national industrial complex status data and employment data of individual plants in industrial complexes. According to the results of the empirical analysis, the amount of production and exports per worker in the industrial complex is greater when the industrial complex is composed of a small number of large companies compared to when the industrial complex is composed of a large number of small and medium-sized companies. In particular, generally similar results are observed in panel analysis using data from multiple years and instrumental variable analysis considering endogeneity. The impact of employment distribution in industrial complexes on economic performance has become more pronounced recently, and the impact is analyzed to be relatively small in agricultural and industrial complexes among industrial complex types. It implies that small- and medium-size firms in industrial complexes do not sufficiently utilize external scale economies and the effect of networks, and indicates that policy efforts to improve them are required.