What roles do high-growth small- and medium-sized enterprises play in a slow-growing region? The job diversity and inclusive growth in Incheon, South Korea

This study examines the labor market outcomes of high-growing incumbent small- and medium-sized enterprises (SMEs) in Incheon during the 2013-2016 economic downturn. By using employee-employer matched panel data, this study found that only a small number of high-growth firms (HGFs) created the majority of new jobs, while other firms reduced their employees in response to the economic challenges. SME HGFs, on the whole, have a tendency to hire people with high human capital. However, a group of HGFs exhibits a different hiring pattern, specifically targeting marginalized individuals in the labor market. Micro-firms that show one time sharp growth are more likely to hire middle-aged unemployed women and provide them with secure and well paying positions. These findings highlight the significant role of incumbent micro-HGFs in job creation and inclusive growth, emphasizing the need for increased attention from policy circles.