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Productivity Distribution, Firm Heterogeneity, and Agglomeration: Evidence from firm-level data

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  • OKUBO Toshihiro
  • TOMIURA Eiichi

Abstract

This paper empirically examines how productivity distributions of firms vary across regions based on Japan's manufacturing census data. We confirm the established finding of higher average productivity in core regions, but find that firm productivity is distributed with wide dispersions, especially in core regions. Our firm-level estimates demonstrate that the productivity distribution of firms tends to be noticeably left-skewed deviating from the normal distribution, especially in regions with weak market potential but also in agglomerated or urbanized regions. These findings suggest that agglomeration economies are likely to accommodate heterogeneous firms to co-exist in the same region.

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Bibliographic Info

Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 10017.

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Length: 33 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:eti:dpaper:10017

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Cited by:
  1. Forslid, Rikard & Okubo, Toshihiro, 2010. "Spatial Relocation with Heterogeneous Firms and Heterogeneous Sectors," CEPR Discussion Papers 8117, C.E.P.R. Discussion Papers.

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