The Korea Local Administration Review

This study explores how external factors of local governments influence theirnetwork capabilities, and suggests policy implications to facilitate networkcapabilities, which have been significant but overlooked in existing studies.According to analytical results, influential factors on network capabilities aredifferent depending on types of network capabilities. Internal network capabilityis dominantly influenced from institutional factors such as systematization ofpolicy·strategy and efficient processes and implementation. In addition,vertical-external network capability is impacted from economic factors such aseconomic condition and local development project activation which are likely tobe dependent on financial·policy support of the central government andmetropolitan governments. For horizontal-external capability, political factorsare statistically significant because of cooperation and conflict among severalinterest groups and interests bargaining. Decision makers in fact haveconsidered network capabilities uniformly without careful analyses, and evenhave not recognized the significance of network capabilities. This resultssuggests that systematically considering these distinctions and commonalities ofinfluential factors on network capabilities, local decision makers need tostrategically manage and develop network capabilities.
□ Keywords: Local Economic Development, Network Capabilities, StrategicManagement