Urban Growth and Industrial Restructuring: The Case of Pusan

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Abstract
In this paper is a discussion of the industrial restructuring process associated with changes in the labor-market condition in rapidly developed countries. The author deals with the case of Pusan, Korea, for the empirical verification. Slow growth in the labour supply and quickly rising wages in rapidly developed economies puts pressure on the existing industries and individual firms to restructure. Like other Asian newly industrialized economies, Korea has been experiencing a shortage of labor and rising wages since 1987. Because most of the industries are export oriented, rising wage levels mean declining competitiveness in the world market. Furthermore, a condition of less elastically changing labor supply makes wage levels even higher in every sector in the economy. Industrial restructuring in this sense means finding a way for survival rather than a simple transformation of industries and firms. In terms of a region, restructuring means the regional relocation of industrial activities, the exit of firms from existing industries, or the internal and external transformation of firms by the changed economic conditions, especially in the labor market. Changing labor-market conditions and subsequent changes in industrial structure in Pusan are discussed in this paper. The causes and consequences of industrial restructuring are discussed on the basis of individual industries.

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