Examining the spatial patterns of green industries and the role of government policies in South Korea: Application of a panel regression model (2006-2012)

Driven by global competition for economic growth, green industries and green jobs have become an important economic engine for sustainable and environmentally-friendly development. Most of the existing literature on green industries has focused on defining the green industry and its economic impacts. However, little empirical research has been conducted on the spatial patterns of green industries, such as their locational preferences. We examined the spatial patterns of green industries in South Korea over time and across municipal-level administrative units (si-gun-gu) using the Survey of Business Activities (2006-2012), which includes longitudinal, establishment-level employment data collected by the Korea National Statistical Office. We employed a panel data regression model to analyze green industries and their locational decisions. The spatial analysis showed that green industries tend to locate in areas where conventional manufacturing industries were previously concentrated. We also identified a new, emerging geographic cluster of green industries. The panel regression models indicated that some green industries, such as the advanced green city industry sector, tend to locate either within or near big cities. In contrast, the renewable energy industry sector tends to locate far from major cities. In addition, we confirmed that the 2009 “Framework Act on Low Carbon and Green Growth” law enacted by the Korean government had a significant impact on the growth of the green industry. However, the act's impact ceased after 2010, indicating the importance of both subsequent policy initiatives and the creation of a private market for green industries and green jobs.