Regional Growth Accounting Analysis and Its Implications

This study conducted Korean regional-level growth accounting analysis from early 2000s. The analysis finds that there had been two regional axes of Korea economic growth in early 2000s; Incheon-Gyeonggi-Chungnam area and Gyeongbuk-Gyeongnam-Busan-Jeonnam-Gwangju area, but in early 2020s, except several major (regional hub) cities, the axes of economic growth have been collapsed to a single area related to capital(Seoul, Gyeonggi, and Incheon) and nearby area(Chungbuk, Chungnam, etc.). This study’s finding implies that, regarding balanced regional development policy the aspect of ‘central vs south area’ is more appropriate than that of ‘capital versus non-capital area’. Also, the finding indicates the necessity of regional development policy focusing on the regional hub cities, showing higher total factor productivity growth compared to nearby regions.