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Firm Size and Job Creation in Korea: Do Small Businesses Create More Jobs?

Author

Listed:
  • Hanhyung Pyo

    (Korea Small Business Institute,)

  • Sungcheol Hong

    (Korea Small Business Institute,)

  • Ahnjeong Kim

    (Korea Small Business Institute,)

Abstract

Using the Census on Establishments data in Korea from 2003 to 2012, we study the relationship between firm size and net job growth rate. When we use average size instead of base year size without controlling for firm age, the effect does become weaker, but we still observe a negative correlation between the two. However, when we control for firm age, the negative correlation between firm size and net job growth rate becomes nonexistent, and in some cases there is even a positive correlation. This is the same even when we use establishment level data instead of firm level data.

Suggested Citation

  • Hanhyung Pyo & Sungcheol Hong & Ahnjeong Kim, 2016. "Firm Size and Job Creation in Korea: Do Small Businesses Create More Jobs?," Korean Economic Review, Korean Economic Association, vol. 32, pages 137-166.
    • Handle: RePEc:kea:keappr:ker-20160630-32-1-06
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    References listed on IDEAS

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    Cited by:

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    3. Kim, Minho, 2017. "Aggregate Productivity Growth in Korean Manufacturing: The Role of Young Plants," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 39(4), pages 1-23.

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    More about this item

    Keywords

    Firm Size; Firm Age; Net Job Creation;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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