earticle

영어

This study measures total factor productivity (TFP) of Korean manufacturing enterprises and decomposes it into technological change and scale effect terms for the period of 2001-2011 by using an abundant firm-level data set. Main findings are as follows: 1) the scale component plays an important role in enhancing productivity of the Korean enterprises, and 2) the size of a firm and TFP growth has a positive relationship. Although many previous studies found that the technological change is the main contributor to the TFP growth to a large extent, this study provides evidence that scale effects have a positive relationship with TFP growth as a whole. Policy implications are developed based on the empirical results. Growth in sales and employees is effective in enhancing performance of Koran manufacturing enterprises, which requires a different explanation on the polarization across Korean enterprises. This finding also demands a new policy paradigm along with the traditional two-track policy strands; to protect SMEs and to regulate conglomerates. For further development of policymakings, supports for Korean small giants or hidden champions are required in order for SMEs to have continuous growth.