Imperfect information and labor market bias against small and medium-sized enterprises: a Korean case
Author(s)Park, Soonae; Kim, Byung-Yeon; Jang, Wonchang; Nam, Kyung-min
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We examine the labor market’s bias against small and medium-sized enterprises focusing on the Seoul Digital Industrial Complex case. We adopt Heckman’s approach to control selection bias, and use primary data from questionnaire surveys conducted at both firm and employee levels. We find that conventional firm-specific factors, such as wages, fringe benefits, and weekly work hours, primarily explain the labor market bias, but imperfect information is also positively associated with the bias. For example, a firm’s inadequate ability to identify a pool of potential employee candidates or to provide them comprehensive firm- or job-specific information tends to worsen labor shortages, and an employee’s ex-ante incomplete knowledge of on-the-job training or education opportunities tends to increase ex-post turnover intentions. Our results suggest that reducing the market bias requires improving imperfect information as well as conventional firm-specific conditions.
DepartmentMassachusetts Institute of Technology. Joint Program on the Science & Policy of Global Change; MIT Energy Initiative
Small Business Economics
Park, Soonae, Byung-Yeon Kim, Wonchang Jang, and Kyung-Min Nam. “Imperfect Information and Labor Market Bias Against Small and Medium-Sized Enterprises: a Korean Case.” Small Business Economics (March 20, 2014).
Author's final manuscript