Analysis of Industrial Diversification Level of Economic Development in Rural Areas Using Herfindahl Index and Two-Step Clustering

Rui Qu, Zaewoong Rhee, Seung-Jong Bae and Sang-Hyun Lee
Additional contact information
Rui Qu: Department of Agricultural and Rural Engineering, Chungbuk National University, Chungdaero 1, Cheongju 28644, Korea
Zaewoong Rhee: Department of Agricultural Economics, Chungbuk National University, Chungdaero 1, Cheongju 28644, Korea
Seung-Jong Bae: Institutes of Green Bio Science and Technology, Seoul National University, 1447 Pyeongchang-daero, Pyeongchang-gun 25354, Korea
Sang-Hyun Lee: Department of Agricultural and Rural Engineering, Chungbuk National University, Chungdaero 1, Cheongju 28644, Korea

Sustainability, 2022, vol. 14, issue 11, 1-19

Abstract: The purpose of this study is to analyze the possible relationship between industrial structure and economic development in rural areas in South Korea. Accordingly, this study uses the Herfindahl–Hirschman Index and a two-step cluster analysis method to conduct an empirical analysis of the rural areas of Chungcheongbuk-do as the research object. The results show that among the 11 regions with concentrated industrial structures, the cluster results of 2 regions changed from the decentralized low employment cluster in 2010 to a concentrated high employment cluster in 2015, while the cluster results of other regions remained unchanged. Among the 18 regions with decentralized industrial structure, the cluster results of 5 regions changed from the concentrated high employment cluster in 2010 to the decentralized low employment cluster. Meanwhile, the cluster results of three regions changed from the decentralized low employment cluster in 2010 to the concentrated high employment cluster in 2015, while the cluster results of other regions remained unchanged. Based on this, it can be concluded that, for general rural areas, a low level of industrial diversification, that is, a concentrated industrial structure, is more conducive to promoting the economic development of rural areas. However, there is a special case, namely that rural areas with certain specific advantages, a high level of industrial diversification, or a decentralized industrial structure are more conducive to the development of the regional economy.

Keywords: rural areas; industrial structure; economic development; HHI index; two-step cluster analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/2071-1050/14/11/6733/pdf (application/pdf)
https://www.mdpi.com/2071-1050/14/11/6733/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:14:y:2022:i:11:p:6733-:d:828747

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().