Employment Distribution by Firm Size and Regional Employment Growth in Korea: A Spatial Econometric Modeling Approach

This study empirically examines the effect of the employment distribution by firm size on regional employment growth from 2005 to 2013. We measure the employment distribution as the share of employees across five firm size categories that range from micro-sized firms to large firms and using uniform index. Our analysis based on regional-level data from the Census on Establishments and we conduct analysis by using a spatial econometric modeling approach. According to the results, we find that regional employment share in firms which more than five employees are more important in employment growth than employment share in micro-sized firms. We also find that regions which possess more evenness in the firm size distribution secure higher employment growth rate. From a planning perspective, this study represents an additional step in framing policy discussions and identifying ways of thinking about regional economic growth and development.