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Industrial relocation policy and heterogeneous plants sorted by productivity: Evidence from Japan

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Author Info

  • Toshihiro Okubo

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

  • Eiichi Tomiura

    (Department of Economics, Yokohama National University, Japan)

Abstract

In an economic geography model with firm heterogeneity, Baldwin and Okubo (2006) show that regional policies for promoting periphery development attract low-productivity firms and adversely affect the productivity gap within a country. This paper empirically examines their theoretical prediction by using plant-level data during active relocation policies in Japan. Our estimation results from plant-level regressions and propensity-score matching are generally consistent with the theory. As compared to other regions, those targeted by policies, especially by industrial relocation subsidy programs, tend to have low-productivity plants.

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File URL: http://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2010-35.pdf
File Function: First version, 2010
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Bibliographic Info

Paper provided by Research Institute for Economics & Business Administration, Kobe University in its series Discussion Paper Series with number DP2010-35.

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Length: 36 pages
Date of creation: Dec 2010
Date of revision:
Handle: RePEc:kob:dpaper:dp2010-35

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Cited by:
  1. Toshihiro Okubo, 2011. "Anti-agglomeration Subsidies with Heterogeneous Firms," Discussion Paper Series DP2011-11, Research Institute for Economics & Business Administration, Kobe University.
  2. Okamuro, Hiroyuki & Nishimura, Junichi, 2011. "Management of Cluster Policies: Case Studies of Japanese, German, and French Bio-clusters," CEI Working Paper Series 2011-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.

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