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Market Access, Agglomeration Economies, and Productive Efficiency (II)

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A New Perspective on Agglomeration Economies in Japan

Part of the book series: New Frontiers in Regional Science: Asian Perspectives ((NFRSASIPER,volume 20))

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Abstract

This chapter examines the impacts of agglomeration economies and fiscal transfer on productive efficiency in Japanese regional industries. Two popular methodologies, stochastic frontier analysis and data envelopment analysis, are applied to measure productive efficiency. The empirical findings are summarized as follows: (1) Agglomeration economies improve productive efficiency. (2) Fiscal transfer negatively influences productive efficiency. (3) Those two findings are observed for aggregated manufacturing and non-manufacturing industries, and for sectors in manufacturing industries. (4) The importance of agglomeration economies for regional industries has increased in recent years. Based on these results, this chapter discusses effective regional policy for Japan.

This chapter is based on Otsuka and Goto (2015) “Regional policy and the productive efficiency of Japanese industries,” published in Regional Studies (Vol. 49, No. 4, pp. 518–531).

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Notes

  1. 1.

    Comprehensive surveys and various advanced models of SFA can be obtained from Kumbhakar and Lovell (2000).

  2. 2.

    See Charnes et al. (1988) and Sueyoshi (1996) for a combined use of DEA and regression analysis.

  3. 3.

    According to the “Net Freight Flow Census (census logistics) 2005,” 84.02% of the total shipment cost is automobile transportation, while marine, air, rail, and other types of transportation account for only 11.86%, 0.008%, 0.84% and 3.26%, respectively. These statistics suggest that using travel costs of automobile transportation is preferable for constructing data on economic distance.

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Authors and Affiliations

  1. Association of International Arts and Science, Yokohama City University, Yokohama, Japan

    Akihiro Otsuka

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  1. Akihiro Otsuka
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Otsuka, A. (2017). Market Access, Agglomeration Economies, and Productive Efficiency (II). In: A New Perspective on Agglomeration Economies in Japan. New Frontiers in Regional Science: Asian Perspectives, vol 20. Springer, Singapore. https://doi.org/10.1007/978-981-10-6490-6_9

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  • DOI: https://doi.org/10.1007/978-981-10-6490-6_9

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  • Publisher Name: Springer, Singapore

  • Print ISBN: 978-981-10-6489-0

  • Online ISBN: 978-981-10-6490-6

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