Regional determinants of total factor productivity in Japan: stochastic frontier analysis
- 508 Downloads
As Japan’s birthrate declines and its society ages, governmental policies need to improve the productivity of regional economies in order to sustain regional growth. This study examines social overhead capital and population agglomeration as drivers of total factor productivity (TFP) growth in Japan. The use of stochastic frontier analysis demonstrates that social overhead capital contributes to TFP growth and, especially, influences productive efficiency. Furthermore, the findings reveal that population agglomeration underpins TFP growth in regional economies. Empirical results also indicate that productive efficiency is high in regions where manufacturing is concentrated and that productive efficiency improves when internationally competitive manufacturers concentrate in regional economies. This study endorses the development of social overhead capital to spur Japan’s regional TFP growth. As such, it indicates that providing social infrastructure and enhancing regional productivity are important strategies for the government to consider in its efforts to achieve sustainable regional growth.
JEL ClassificationR11 R30 R38
This study was funded by Japan Society for the Promotion of Science (Grant no. 15K17067). In addition, I have received Grant-in-Aid as Young Scientific Research by Yokohama City University.
- Ciccone A, Hall R (1996) Productivity and the density of economic activity. Am Econ Rev 86(1):54–70Google Scholar
- Combes PP, Gobillon L (2015) The empirics of agglomeration economies. In: Duranton G, Henderson JV, Strange W (eds) Handbook of regional and urban economics, vol 5A. Elsevier, Amsterdam, pp 247–348Google Scholar
- Eberts RW, McMillen DP (1999) Agglomeration economies and urban public infrastructure. In: Cheshire P, Mills ES (eds) Handbook of urban and regional economics, vol 3. North Holland, New York, pp 1455–1495Google Scholar
- Good DH, Nadiri MI, Sickles RC (1997) index number and factor demand approaches to the estimation of productivity. In: Handbook of applied econometrics: microeconometrics, vol 2, pp 14–80Google Scholar
- Marshall A (1890) Principles of economics. Macmillan, LondonGoogle Scholar
- McCann P (2001) Urban and regional economics. Oxford University Press, New YorkGoogle Scholar
- Otsuka A, Yamano N (2008) Industrial agglomeration effects on regional economic growth: a case of Japanese regions. Discussion papers 08-T-2, Regional economics applications laboratory, University of Illinois, ILGoogle Scholar
- Rosenthal S, Strange W (2004) Evidence on the nature and sources of agglomeration economies. In: Henderson JV, Thisse JF (eds) Handbook of regional and urban economics, vol 4. Elsevier, AmsterdamGoogle Scholar