Structural Change and Productivity in the Retail Industry : A Comparison of Korea and Japan

The structure of retail industry in Korea has similarities with that in Japan. The proportion of small businesses in the retail industry in two countries, is relatively high compared to that of the western developed countries, such as the United States. The proportion of small businesses among all businesses in Korea’s retail industry was 94% in 2010. The same proportion in Japan’s retail industry was 67% in 2012. The proportion in Japan is lower than that in Korea, but their respective proportions are very high compared to that in the United States, 40% in 2007.The retail industry’s structure has been significantly affected by the emergence of large-scale retail enterprises and the regulation policies of government. In the United States, the large-scale retailers have emerged in the early 20th century. Since then, the structural adjustment in the retail industry has been carried out for more than a century, and the regulations of the large-scale retailers have hardly been implemented. On the other hand, Japan was advanced in time than Korea in these two aspects. The large retail stores have rapidly expanded in Japan since the 1960s, while in Korea it was in the 1990s. And the regulatory policies were introduced in 1973 in Japan and in 2010 in Korea. As a result, the structural change in the retail industry has been started earlier in Japan than in Korea.In short, the retail industry’s structure in Japan is very similar to that in Korea, and the retail industry’s structural change in Japan have been initiated earlier than in Korea. Therefore, it is expected that the process of the structural change in Japan’s retail industry provides significant implications for the Korea’s retail industry.In this paper, we examine the impact of the retail industry’s structural change on labor productivity and employment in Korea and Japan, respectively. Then we suggest the implications for improving productivity of the Korea’s retail industry based on the comparison of the results of the analysis