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Monitoring Spatial Changes in Manufacturing Firms in Seoul Metropolitan Area Using Firm Life Cycle and Locational Factors

by 1,* and 2
1
The Department of Urban Planning and Design, The University of Seoul, Seoul 02504, Korea
2
The Department of Land Economy, The University of Cambridge, 19 Silver Street, Cambridge CB3 9EP, UK
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(14), 3808; https://doi.org/10.3390/su11143808
Received: 3 May 2019 / Revised: 1 July 2019 / Accepted: 3 July 2019 / Published: 11 July 2019
This paper diagnoses the development of the manufacturing industry in the Seoul Metropolitan Area (SMA) using portfolio and regression analyses. Following the life-cycle perspective, four types of spatial changes of firms have been identified, namely firm formation, inflow, outflow, and dissolution, which are applied to analyze the manufacturing development in SMA. For portfolio analysis, we propose the Net Formation Index and Net Inflow Index to measure the spatial changes of firms at the city level. The two indices facilitate horizontal comparison among cities in SMA in terms of firm growth from new opening and relocation. Using spatial regression analysis, we identify significant location factors that contribute to firm change patterns. Our tests show that a high level of industrial specialization (measured by location quotient) has a dual effect. On the one hand, high level specialization attracts new or inflow firms, particularly in the light and high-tech manufacturing industries. On the other hand, it leads to an increased number of closed or outflow firms, plausibly due to increased competition among local firms. The proposed methods can be applied to diagnose industrial development in clusters of inter-connected cities and design policy tools to boost the local industry. View Full-Text
Keywords: firm’s life cycle; locational factors; manufacturing firms; monitoring spatial changes firm’s life cycle; locational factors; manufacturing firms; monitoring spatial changes
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MDPI and ACS Style

An, Y.; Wan, L. Monitoring Spatial Changes in Manufacturing Firms in Seoul Metropolitan Area Using Firm Life Cycle and Locational Factors. Sustainability 2019, 11, 3808. https://doi.org/10.3390/su11143808

AMA Style

An Y, Wan L. Monitoring Spatial Changes in Manufacturing Firms in Seoul Metropolitan Area Using Firm Life Cycle and Locational Factors. Sustainability. 2019; 11(14):3808. https://doi.org/10.3390/su11143808

Chicago/Turabian Style

An, Youngsoo, and Li Wan. 2019. "Monitoring Spatial Changes in Manufacturing Firms in Seoul Metropolitan Area Using Firm Life Cycle and Locational Factors" Sustainability 11, no. 14: 3808. https://doi.org/10.3390/su11143808

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