Dynamic Shift-Share Analysis on the Characteristics of Industrial Structure in Gyeong-gi Province
Authors:   Asia-Europe Perspective Association, Oh Sae-Joon , Yang Young-Jun 
Published: December 2024

Gyeong-gi Province is an area where the population continues to increase. It is also an area with excellent regional competitiveness in terms of GRDP and labor force. Based on the high population inflow and increased industrial production, Gyeonggi Province has the highest growth base nationwide. However, not many studies have analyzed which industries have a positive impact on the growth of local industries, and which are negatively affecting regional growth. The purpose of this study is to analyze the character- istics of the industrial structure of Gyeong-gi Province. In detail, this study analyzed which industries in Gyeong-gi have a positive impacts on regional growth and which have a negative impacts on regional growth, and whether the increase or decrease in output or workers in the industrial sector is due to the overall growth of the country or due to the industrial structure and regional competitiveness.
A dynamic shift-share analysis was conducted between 2012 and 2018 by utilizing data on the total GRDP of each industry and the number of employees in Gyeong-gi. Dynamic shift-share analysis is a method that analyzes the industrial composition, production and income of a region or the increase in employment or the change in employment structure in that region. The result shows that industries that have positive effects in both industry mix effect(IME) and regional share effect(RSE) are construction, lodging and F&B businesses, and social welfare services. The result might be caused by the rapid concen- tration of population in Seoul and the metropolitan area, and can be seen as a relatively high competitive situation compared to other regions.
In net relative change effect, industries that have shown positive signs in both gross regional domestic product and the number of workers are mining, construction, transportation, lodging and restaurant busi- nesses, publishing, information services, real estate, business services, public administration, defense and social security administration, and health and social welfare services. Those industries can be seen as a comparative advantage over other regions, which Gyeonggi Province has continuously invested heavily to support small and medium-sized enterprises, attracted foreign investment and expanded exports, and invested heavily in SOC facilities. It caused a continued influx of people. It can be said that the scale and competitiveness of these industries have increased due to the active development of housing sites and new towns to accommodate the inevitably flowing population. With its excellent industrial structure and regional conditions, those industries are responsible for driving industries in Gyeong-gi province. On the other hand, financial and insurance industries, education services, culture and other service industries are interpreted as industries with relatively low competitiveness compared to other regions, with net relative change effects showing negative signs in both gross regional domestic product and the number of workers. As such, it is necessary to increase investment in industries that have been shown to be less competitive and to increase their competitiveness. The results helps to understand the development and decline status of the industry and to propose a long term policy