• Journal of the Korean Regional Science Association
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• v.33 no.3
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• pp.3-19
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• 2017

The purpose of this paper is to analyze the impacts of regional industrial diversity on regional business cycle response to national volatility. We employed mean group and pooled mean group estimators of panel vector error-correction models in order to control unobserved heterogeneity of the port cities, such as Pusan, Ulsan and Incheon. The results show that in various industrial regions, short-term fluctuations in the unemployment rate are small compared to other regions. On the contrary, long-term volatility of manufacturing production index is low in those regions.