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A Study on the Total Factor Productivity and Its Determinants with Spatial Effects

박광서 1

1한국해양수산개발원

Accredited

ABSTRACT

Growth of GRDP(Gross Regional Domestic Product) is affected by inputs of production factors such as labor and capital, and improvement of total factor productivity(TFP). To sustain constant growth and competitiveness of regions, improvement of TFP is preferred to increase of traditional production factors. The theoretical arguments and substantive importance of TFP have vastly introduced in diverse academia, however, less well-known are the rate of return of each production factors to determine TFP and its determinants to explain the TFP. The purpose of the present study is to estimate TFP and its determinants for metro-level cities and provinces during the periods of 1995 to 2009 in Korea. We found that TFP tended to be increased during the periods, but increasing trend of its rate of return has been diminished. We also found that rate of return of TFP for metro cities is lower than that of provincial regions. Diverse determinants have been identified to increase the level of TFP. Among others, capacity building of superior human resources, improvement of financial independence, expansion of welfare budget were important factors that enhance the TFP. The present study also vindicate the effects of urbanization economy and localization economy is smaller than expected a priori. This finding implies that in order to increase TFP, reinforcing networks among diverse innovative agencies is more important than functional integration of geographical autonomy.

Citation status

* References for papers published after 2022 are currently being built.