The impact of the innovation city project on the local economy: Evidence from Korean Innovation City Project from 2012 to 2014

Seongmin Seo, Do Won Kwak

Research output: Contribution to journalArticlepeer-review

Abstract

This study employs a difference-in-differences approach to investigate the impact of the Korean Innovation City Project (KICP) on employment and productivity. KICP is a place-based policy that involved relocating public institutions and providing economic incentives to attract businesses. Our findings show that newly established businesses experienced positive employment effects mainly in the nontradable sector, but temporary negative productivity effects in the tradable sector. We also identified significant positive spillover effects on productivity for incumbent businesses. Moreover, our results suggest that the effectiveness of place-based policies should consider sectoral heterogeneity, between-firm spillover, and lasting effects.

Original languageEnglish
Article number101677
JournalJournal of Asian Economics
Volume90
DOIs
Publication statusPublished - 2024 Feb

Bibliographical note

Publisher Copyright:
© 2023 Elsevier Inc.

Keywords

  • Business incentives
  • Local economic development policy
  • Local labor markets
  • Place-based policies
  • Spillover effects

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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