Metropolitan Governance Matters: The Low Economic Performance of Metropolitan Cities in South Korea

Abstract

This study undertakes an empirical analysis to identify the determinants of the low economic performance of major metropolitan cities in Korea. Using panel data of the metropolitan cities between 2000 to 2016, I carried out ageneralized least square estimation and obtained the following results. First, traditional explanatory variables such as capital investment, labor force, and R&D investments are highly significant with positive expected signs. Second, nationallevel governance arrangements for the metropolitan cities have negative impacts on the economic performance of the cities. Last, the impacts of subnational governance arrangements on economic performance are not entirely conclusive. These pieces of evidence suggest that improving the economic performance of the metropolitan cities may require a restructuring of the current framework of metropolitan governance.