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A Research on the Relation between Capital Intensity and Value-added: The Application of the Hypothesis of Galenson and Leibenstein using IRIO Model (in Korean)

Author

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  • Haemyoung Ji

    (Economics Department of Kangwon National University)

Abstract

Analysing the relation of capital intensity and value-added, a model that includes capital intensity as exogenous variables based on the value-added multiplier model of MRIO is constructed. The total effects of Seoul, Gyeonggi-do and Jeollanam-do region are greater than those of the other regions, and the effects of Gwangju, Daejeon, Jeju-do are smaller than those of the other regions. The intra-regional effects of Jellanam-do, Gyeongsangbuk-do, and Jellabuk-do are greater, and those of Seoul, Daejun, and Jeju-do are smaller than those of other regions. Unlike the multiplier effects of the other IRIO analyses(demand, output, and value-added multipliers), first, the relations among adjacent regions are stronger; second, the inter-regional relations of the Sudo-kwon(Seoul, Incheon, Gyeonggi-do) and with the other relations are weaker; third the spill-over effect on Jellanam-do from the other regions are greater. In the view of industrial level, the positive relations between capital intensity and value-added creation are identified. The hypothesis of Galenson and Leibenstein are not fully applicable to the regional industrial level in Korea due to the different effects of value-added creation by heightening capital intensities.

Suggested Citation

  • Haemyoung Ji, 2014. "A Research on the Relation between Capital Intensity and Value-added: The Application of the Hypothesis of Galenson and Leibenstein using IRIO Model (in Korean)," Economic Analysis (Quarterly), Economic Research Institute, Bank of Korea, vol. 20(2), pages 27-55, June.
    • Handle: RePEc:bok:journl:v:20:y:2014:i:2:p:27-55
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    Keywords

    Capital Intensity; Value-added Creation; Value-added Multiplier; Galenson & Leibenstein Hypothesis;
    All these keywords.

    JEL classification:

    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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