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Economies of Density and Productivity in Service Industries: An Analysis of Personal Service Industries Based on Establishment-Level Data

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  • Masayuki Morikawa

    (Research Institute of Economy, Trade and Industry)

Abstract

This study aims to empirically investigate the determinants of service industry productivity, such as economies of scale and economies of density. By using establishment-level data related to personal service industries in Japan, the study estimates the production functions for both value-added and physical output measures. In almost all the service industries examined, significant economies of scale and economies of density are observed, wherein productivity increases by 7%% to 15%% when the municipality population density doubles. These findings are confirmed by an estimation in which the measures of physical output are considered instead of value added. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 93 (2011)
Issue (Month): 1 (February)
Pages: 179-192

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Handle: RePEc:tpr:restat:v:93:y:2011:i:1:p:179-192

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  1. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
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Citations

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Cited by:
  1. MORIKAWA Masayuki, 2010. "Economies of Scale and Hospital Productivity: An empirical analysis of medical area level panel data," Discussion papers 10050, Research Institute of Economy, Trade and Industry (RIETI).
  2. Tanaka, Kiyoyasu & Hashiguchi, Yoshihiro, 2012. "Spatial spillovers from FDI agglomeration : evidence from the Yangtze River Delta in China," IDE Discussion Papers 354, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  3. Hashiguchi, Yoshihiro & Tanaka, Kiyoyasu, 2013. "Agglomeration and firm-level productivity : a Bayesian spatial approach," IDE Discussion Papers 403, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  4. MORIKAWA Masayuki, 2008. "Demand Fluctuations and Productivity of Service Industries," Discussion papers 08030, Research Institute of Economy, Trade and Industry (RIETI).
  5. Morikawa, Masayuki, 2012. "Population density and efficiency in energy consumption: An empirical analysis of service establishments," Energy Economics, Elsevier, vol. 34(5), pages 1617-1622.
  6. MORIKAWA Masayuki, 2011. "Urban Density, Human Capital, and Productivity: An empirical analysis using wage data," Discussion papers 11060, Research Institute of Economy, Trade and Industry (RIETI).

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