서강대학교

초록

Does the expansion of domestic transportation networks enliven local economic activity in the developed world? In this paper, we compile an extensive set of micro-data on establishments and road networks to investigate the impact of the improvement of accessibility to international and domestic markets in South Korea on manufacturing establishments’ activity during 2012-2018. We introduced three town-level accessibility measures: a minimum travel distance along with road networks to ports and closeness centrality, a measure widely used in network theory. Through these measures, we highlight the importance of accessibility for the local economies of South Korea, the export-driven country where the domestic transport cost is as much important as international transport cost. To mitigate the endogenous choice of road construction, we use the historical road network 100 years ago as an instrument variable. Our main result shows that the 1% drop in the travel distance to ports causes the number of manufacturing establishments to increase approximately by 2.5%. This positive impact is further translated to employment by 3.8%, dominated by exporting establishments’ response.