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Jinju City has long been popular as a center of the silk industry in Korea, which occupies about 76 per cent of the national total output of silk products. This paper attempts to explore the following two issues associated with the Jinju’s silk industry. Why did silk production firms choose Jinju city and why do they sustain their business activities in Jinju City? The main findings to these questions are as follows. First, there is a tendency that Jinju’s silk industry shows continuous decrease in the number of firms and employees since the mid 1990s, owing to failure of local firms to catch up new trends in markets and technology. The remaining firms are mostly small and medium sized, and lag behind European firms in terms of technology and Chinese firms in terms of production costs. Second, it shows that Jinju’s silk production firms see Jinju as a good place of silk productive location in terms of both traditional agglomeration economies such as industrial linkages and labour pool and new economic geographical location factors such as network advantages. However, it is problematic to sustain Jinju’s silk industry that local silk firms reveal relatively weak in untraded interdependencies and incentives to innovative.

Agglomeration and Locational Characteristics of the Silk Industry in Jinju City, Korea