It is generally accepted that Kangwon and Jeju Province have been the most popular tourist attractions in Korea. As a leading and strategic industry both Kangwon and Jeju Provinces have chosen tourism service sectors which have been supported financially by the local governments and have grown rapidly during the last two decades. Therefore it is desirable and significant to compare the tourism service industries in the two regions on the perspectives of productivity.
The purpose of the thesis is to compare productivities for tourism service sectors in Kangwon and Jeju Provinces and to elucidate the properties of the estimated productivities in the two regions. This thesis establishes the estimation model for Solow residual based on Hall's(1990) and Basu's(1996) models and the empirical model for technological coefficient derived from the constant returns to scale production function. The thesis estimates Solow's residuals and technological coefficients in the two tourism service industries which are wholesale·retail and foods·accommodation for Kangwon and Jeju Provinces over the period 1985:1-2011:4 and analyzes the cyclicality of measured productivities.
The empirical results are summarized as the followings. First, the annual growth rates of Solow's residual were estimated to be 3.57% in wholesale·retail and 1.41% in foods·lodging for Kangwon Province. In case of technological coefficients wholesale·retail and foods·accommodation show 0.16% and1.69% respectively which were estimated to be much lower than the Solow residual case. In Jeju Province the rates showed 4.71% in wholesale·retail and 2.46% in foods·lodging which are higher than those in Kangwon Province. Second, the correlation coefficients with the HP-filtered GDP showed the Solow's residuals and technological coefficients in the both industries for Kangwon and Jeju to be procyclical. Third, The comparison of productivity growth rate with real wage rate leads us to the conclusion that real wages have not been increased as much as the productivity growth rate has increased in the tourism service industries for both provinces over the sample period.