Scale Externalities in Korea

This paper estimates the nature and magnitude of scale externalities in a developing country, Korea, in the period 1983–1993. This is a period of rapid industry deconcentration from Seoul to other metro areas, providing a context where externalities are measured when local scale magnitudes are changing dramatically. The data allow us to examine the emerging degree of national industrial concentration in different industries, as related to their scale externality magnitudes. We also examine whether individual industries agglomerate in cities which have a comparative advantage for that industry.