A Study on The Relation between Regional Economic Growth and Knowledge-based Industry

Abstract

Knowledge has emerged as a new engine of economic growth. In this context, this paper explores the effects of knowledge-based industries on economic development of the regions in Korea. In particular, knowledge-based manufacturing industries and knowledge-based service industries are used as independent variables. Industrial structure, agglomeration economy, human resource, labor condition, R&D resource, financial capacity are included as control variables. Using the panel data collected during the years of 2001-2013 from 15 regions in Korea, the quantitative model is analyzed by fixed effect model and random effect model. The empirical results of this study are as the following. First, knowledge-based manufacturing industry and knowledge-based service industry have effects on the regional economic productivity. Second, among the control variables, R&D resource, human resource, financial capacity are critical to the regional economic productivity. Third, manufacturing-oriented industrial structure and unemployment rate have negative influence on the regional economic productivity. This study suggests that policy makers should pay special attention to develop knowledge-based industries and service-oriented industries for future economic growth of regions.