Research Reports
A Study on the Disparities in Economic Opportunities among various Rural Areas
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AuthorPark, Sihyun
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Publication Date2005.12.01
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Original
This study is the second year report of the three-year collaborative research entitled, “A study on mitigation of income gap between urban and rural areas through the balanced regional development strategies". This study is organized by the Korean National Research Council for Economics, Humanities and Social Science. The ultimate purpose of the study is to search an policy alternatives for reducing the income gap between rural and urban areas.
This present study analyses on current situations and main reasons of economic disparities in rural areas with focusing on the issue of economic opportunities, such as employment, and figures out possible strategies to revitalize a declining rural economy.
The study is consisting of four parts,
1)A theoretical review of regional development theories and empirical studies on rural development cases in the developed countries,
2)A quantitative analysis of current economic situations and the reasons of income gaps between rural areas,
3)A quantitative analysis of the reasons of employment disparities in rural areas, and case studies on location decision of business enterprises in a rural area,
4)A case study on the reasons of disparities in economic opportunities among rural areas. Six different areas were compared.
The results of the above analyses can be summarized as follows:
Firstly, rural development is basically facilitated by exogenous advantages. As the results of regression analysis on factors determining regional income at each rural city or county level, the exogenous variables turned out to influence rural development significantly. The variables include accessibility to big cities, GDP proportion of manufacturing industry, and so on. There is some evidence of self-revitalization that tries to identify or utilizes endogenous resources. However, the self-effort for regional revitalization was not enough to create new employment opportunities or strengthen the local industrial infrastructure. Instead, the self-effort helps the unemployed support themselves, this would relieves the local economy from continuous declining.
Secondly, the lessons from the empirical case studies in developed countries are partially relevant to Korean rural context. For example, regional competitiveness comes from innovation capacities in region. However, most of the rural areas have very limited number of innovative actors so that local innovative actors' efforts are not enough to promote regional competitiveness.
Thirdly, in addition, most of the economic activities of farm households are not diversified, and industrial linkage effects among economic actors or institutes at the local level are not clearly shown. However, there are a few areas where business network have been closely connected within a place. The local employment has been increased with local organizations' public supports such as the chilly-source processing industry in Suchan-gun. It is not certain that forward and backward linkage industry accumulation occurs naturally within the place so that the linkage would evolve into the industrial cluster.
In conclusion, the significance of indigenous resources in substantiating spatial development in rural areas should not be ignored. The indigenous resources are necessary, but not sufficient to accelerate rural development. The indigenous resources are more important, when the rural area tries to induce various exogenous resources for the regional development projects. Therefore, rural development plan should be reflected of the rural reality by means of a comprehensive perspective. Policy-makers need to consider direct spill-over effects of exogenous development centers into targeted rural areas at first hand. They also need to promote niche-markets capitalizing place-specific resources that are endemic to each rural area on a complementary basis.
Researchers: Shi-Hyun Park, Joo-in Seong, Eun-Jung Shin
Researchers: Seung-Yeol Yee, Sang-Ho Kim, Seung-Wook Heo,
Researchers: Ju-Mong Na, Han-Sung Lee
E-mail address: shpark@krei.re.kr
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