Are industrial parks in Korea evolving? Or are they just aging?

This study investigates how the age of industrial parks may affecttheir tenants’ performance, to find ways to enhance the positiveeffects of industrial parks and the efficiency of their regeneration. We identify a relationship between the parks’ age and tenants’performance. Further, we estimate changes in tenant performanceagainst the age of the park. The analysis is based on firm-leveldata of 1812 small- and medium-sized manufacturing firms withonly one factory in any given industrial park in 2016. Theimportant findings that can be drawn from our study are asfollows. First, the relationship between the park’s age and patentapplications filed by tenants (the proxy of firm performance)follows a U-shape. Firms located in very new or longer establishedparks have more patents. Second, the relationship between theage of the park and tenants’ sales follows an inverted U-shape. Firms in middle-aged parks show higher sales per worker. Finally,firms that have just moved into the park or young firms movinginto the park perform better. We suggest that a government bodyshould create different approaches for improving innovation andmanagement performance to regenerate industrial parks.