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Industrial Relocation Policy and Heterogeneous Plants Sorted by Productivity: Evidence from Japan

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  • OKUBO Toshihiro
  • TOMIURA Eiichi

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 that are generally consistent with the theory. Compared to other regions, those targeted by policies, especially by industrial relocation subsidy programs, tend to have low-productivity plants.

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  • OKUBO Toshihiro & TOMIURA Eiichi, 2010. "Industrial Relocation Policy and Heterogeneous Plants Sorted by Productivity: Evidence from Japan," Discussion papers 10016, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:10016
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    Cited by:

    1. Toshihiro Okubo, 2012. "Antiagglomeration Subsidies With Heterogeneous Firms," Journal of Regional Science, Wiley Blackwell, vol. 52(2), pages 285-299, May.
    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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