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Industrial agglomeration effects in Japan: Productive efficiency, market access, and public fiscal transfer

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  • Akihiro Otsuka
  • Mika Goto
  • Toshiyuki Sueyoshi

Abstract

This study examines whether agglomeration economies, market access and public fiscal transfer have a positive or negative influence on the productive efficiency of Japanese regional industries. To attain the research objective, stochastic frontier analysis is applied to a Japanese data set at a prefecture level which consists of estimated spatial and industrial economic activities from 1980 to 2002. An empirical result obtained in this study indicates that both the agglomeration economies and the improvement of market access have a positive influence on the productive efficiency of Japanese manufacturing and non‐manufacturing industries. In contrast, the public fiscal transfer has a negative impact on the productive efficiency. These findings indicate that many prefectures (corresponding to States in the United States), which are characterized by weak market access and/or high dependence on public fiscal transfer, are often associated with their low productive efficiency. Resumen Este estudio examina si las economías de aglomeración, acceso a mercados y transferencia fiscal pública tienen una influencia positiva o negativa en la eficacia productiva de las industrias regionales japonesas. Para lograr el objetivo de la investigación se aplica un análisis de frontera estocástica a un conjunto de datos de Japón a escala de prefectura, el cual consiste en actividades económicas espaciales e industriales estimadas entre 1980 y 2002. Un resultado empírico obtenido en este estudio indica que tanto las economías de aglomeración como la mejora en el acceso a mercados tienen una influencia positiva en la eficacia productiva de las industrias japonesas manufactureras y no manufactureras. En contraste, la transferencia fiscal pública tiene un impacto negativo en la eficacia productiva. Estos hallazgos indican que muchas prefecturas (equivalentes a los estados de los Estados Unidos), caracterizadas por un pobre acceso a mercados y/o dependencia de transferencias fiscales públicas, están asociadas a menudo con su baja eficacia productiva.

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  • Akihiro Otsuka & Mika Goto & Toshiyuki Sueyoshi, 2010. "Industrial agglomeration effects in Japan: Productive efficiency, market access, and public fiscal transfer," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 819-840, November.
    • Handle: RePEc:bla:presci:v:89:y:2010:i:4:p:819-840
    DOI: 10.1111/j.1435-5957.2010.00286.x
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    References listed on IDEAS

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