Seoul Institute Logo

You are here


[SeTTA] The Analysis of Self-Employed Business Closure in Seoul

Ju JaeukㆍYun Jongjin

The purpose of this study is to identify the current status and characteristics of Seoul's self-employed business. Monthly closure indicators for self-employed people in Seoul were developed using The Seoul Credit Guarantee Foundation DB, Open API Status Inquiry Service provided by National Tax Service, changing the closure of the business and industry after COVID-19 and 'domino closure' phenomenon was identified. As a result of the analysis, during the COVID-19 season Seoul's self-employed business closure did not increase overall except for temporary fluctuations. According to the analysis of each business area, the traditional market and the developed market did not show the increase of the closure during COVID-19, and the number of businesses in operation increased. In the case of alleys and special tourism zones, the closure of the first half of 2021 increased slightly, which is the only evidence of the increase of the closure. We demonstrated the impact of closing business in the neighborhood using the Cox proportional hazard model. It also analyzed the time change of parameters by using the scaled Scheonfeld residual. As a result of the analysis, the risk rate increased by 67% when one closing business of the same industry increased. The policy implications are as follows. Since the closure of business is inevitable for external economic shocks, small public policy for the purpose of quantitative management of the closure of business should be avoided, and the direction of improving procedural convenience is preferable. First, we need to support smooth closure. There must be a system that can solve various problems that may occur during the closing process. Second, it should be able to support the fast and accurate decision making of business owners. It is necessary to provide a system to help judge the continuation of the business by providing market information and management diagnosis. Third, we need to support the secure road. It is necessary to reinforce support policies such as education and consulting for being hired or restarting business. Lastly, it is helpful for small business owners to compensate for the social safety net by reviewing policies such as promoting employment insurance and preservation of small-income business.