ABSTRACT
In this paper, the effects of liberalization in retail markets on the economy and retail industry in Korea are analyzed. The Korean retail market has been opened to foreign retailers since 1996. The results of the liberalization are the introduction of new types of retail business and the scale of retailers has increased. Moreover, it is said that the Korean retail market has been changed to be a more efficient market. These results of liberalization can have positive effects on the Korean economy including the retailing industry and consumers. The results in this paper, however, indicate that the effects of the liberalization on the retail industry and economy were not as positive as expected. Analysis of change in retail productivity showed that average store size and labor productivity increased, but sales per unit of space did not change. On the other hand, negative effects resulting from the liberalization have occurred especially affecting the small and medium sized retailers, and regional economies. The effects of the liberalization can be evaluated as both positive and negative depending on the market and economic situations inside and outside the country. Even if the effects of the liberalization have been positive so far, future effects may be different especially due to the influence of China's market.
