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Total factor productivity and the convergence of disparities in Japanese regions

Author

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  • Akihiro Otsuka

    (Central Research Institute of Electric Power Industry)

  • Mika Goto

    (Tokyo Institute of Technology)

Abstract

Japan’s regional economies face global competition amidst the challenges of a declining and aging population. Given such economic conditions, Japan’s total factor productivity (TFP) requires boosting to achieve competitiveness in regional economies. Although labor productivity is a popular measure for the analysis of productivity and has been a focus of prior studies, TFP’s comprehensiveness is a preferable measure. This study measures TFP using regional data from Japan and tests if the convergence of regional TFP disparities can be detected since 1980. The results show that TFP has continually increased and converged to reduce regional disparities over the study period. We perform statistical analysis of the regional convergence in TFP using a stochastic convergence model and find that TFP converged at each region’s stationary level, not at the nationwide unique level. These results provide policy implications for Japan’s regional economies.

Suggested Citation

  • Akihiro Otsuka & Mika Goto, 2016. "Total factor productivity and the convergence of disparities in Japanese regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(2), pages 419-432, March.
    • Handle: RePEc:spr:anresc:v:56:y:2016:i:2:d:10.1007_s00168-016-0745-x
    DOI: 10.1007/s00168-016-0745-x
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    References listed on IDEAS

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    Cited by:

    1. Akihiro Otsuka, 2017. "Regional determinants of total factor productivity in Japan: stochastic frontier analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(3), pages 579-596, May.
    2. ADACHI Yusuke & OGAWA Hikaru & TSUBUKU Masafumi, 2022. "Crises and changes in productivity distributions: a regional perspective in Japan," Discussion papers 22041, Research Institute of Economy, Trade and Industry (RIETI).
    3. Xiaoxi Wang & Yaojun Zhang & Danlin Yu & Xiwei Wu & Ding Li, 2022. "Changes in Demographic Factors’ Influence on Regional Productivity Growth: Empirical Evidence from China, 2000–2010," Sustainability, MDPI, vol. 14(7), pages 1-19, April.
    4. Akihiro Otsuka, 2021. "A new approach to inter‐regional network externalities in Japan," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 1051-1067, June.
    5. Kinfemichael, Bisrat & Morshed, A.K.M. Mahbub, 2019. "Convergence of labor productivity across the US states," Economic Modelling, Elsevier, vol. 76(C), pages 270-280.

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    More about this item

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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