Sunday, December 19, 2010

An Empirical Evidence from Both Local Level and Individual Firm Level: The Demand- and Supply-Side Spatial Spillovers in the Food Processing Industry in Korea

ABSTRACT: From the perspective of the food system, the overall food manufacturing or processing industry is fundamentally connected both with agricultural production in rural areas and consumption demand usually concentrated in urban areas. Using the local government level and individual firm level data for the food manufacturing industry in Korea, this paper investigated the agglomeration and spillover effects in this industry. This study found that there exist significant productivity differentials over space in food processing industry. This paper also found the evidences of agglomeration economies; the place where the size of population is large performs better. The results showed some evidences of spillover effects; negative externalities from congestions of neighbors and positive spillovers of the increasing accessibility to material input producers in the neighboring regions.

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