Do historical events matter in geographic agglomeration? The case of South Korea

This study examines whether historical events are as important as Krugman (1991a) had suggested they are in determining geographic agglomeration. Using the time series of Korean manufacturing (1955-2003), which is longer than other country studies, the study also examines how the mean reversion factor and dispersion factor have evolved during substantial economic development. The results confirm that industry mobility in Korea is high and the historical events may not be so important in geographic agglomeration of industries. The analysis of the mean reversion factor and dispersion factor supports the argument that transport costs are a major source of change in geographic agglomeration in the long run.