The Korea Local Administration Review

This study analyses the effect of economy of agglomeration on industrial clusters in korean metropolises and provinces. Utilizing industry-region specific data, the effects of agglomeration economy on added value of manufacturing industry are estimated by log-linear multiple regression analysis. And the significant variables estimated by the regression analysis are examined by logistic regression analysis to see if the variables contribute to increase added value of manufacturing industry in local clusters.
From the result of the multiple regression analyses, the effect of localization economies which is one of the agglomeration effects is significant in both the material industry and the assembly industry. On the other hand, the effect of urbanization economies, another agglomeration effect, is significant only in the consumer's goods industry. From the results of logistic regression analysis, However, we can't find the significant effects of the localization economies to increase added value of manufacturing industry in local clusters.