Page 78 - Contributed Paper Session (CPS) - Volume 6

CPS1826 Younyoung Park

A Study on the Relationship between Life Cycle
of Enterprises and Affecting Variables in Korea
Younyoung Park
Statistics Korea, Daejeon, Korea

Abstract
Information on the life cycle of enterprise provides very useful tool to
economic entities participating in industrial activities. The purpose of this
paper is to derive the measurable indicators for the life cycle and affecting
variables of the enterprises and to analyze the relationship. To increase the
efficiency of the research, the scope of the study could be supposed to limit
the manufacturing industry, wholesale and retail, accommodation and
restaurant business. The main tasks are to address the indicators that could be
used to diagnose the business life cycle by industry and scale, to examine the
affecting variables, to analyze relationship between them and to seek the
findings and policy implications. As a data source to identify the life cycle,
business demography statistics which was developed in 2012 from statistics
Korea was used. As for the variable indicators, it used the economically active
population survey, whole country establishment survey, GRDP, national
balance sheet, and trade characteristics statistics considering the measurability
by industrial sector. Dataset from each statistics has been reprocessed into 10
indicators. The relationship analysis has been intensively conducted in two
years of 2012 and 2015 because of data availability and so forth. The first
finding is that the birth and death of enterprises are lower as the number of
employees increases. Secondly, industries intensively combined with land,
labor and capital in some degree, such as manufacturing, are less likely to be
born and disappeared than service industries that are easier to enter the
market. The third finding is that manufacturing sector could accumulate the
net capital stocks due to the high proportion of imports and exports and value
added. These could be regarded as the result of concentrating on the
favorable tax system and policies of the government. On the other hand, the
hospitality which is one of representative service industry has not been able
to accumulate a large amount of net capital stock. Therefore fundamental of
this sector has not been improved for a long time. Fourthly, although
manufacturing sector is dominating in the portion of exports and imports and
capital stock, the proportion of employment is relatively low. On the other
hand, the service sector is high proportion in employment and fundamental
of industry is still questionable. As for the policy implications, it seems that
there is a need to strengthen competitiveness for service industry, which has
a high proportion of employment. In the case of manufacturing, the sound

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