Measuring economic localization: Evidence from Japanese firm-level data

Kentaro Nakajima, Yukiko Saito and Iichiro Uesugi

Journal of the Japanese and International Economies, 2012, vol. 26, issue 2, 201-220

Abstract: This paper examines location patterns of Japan’s manufacturing industries using a unique firm-level dataset on the geographic location of firms. Following the point-pattern approach proposed by Duranton and Overman (2005), we find the following. First, about half of Japan’s manufacturing industries can be classified as localized and the number of localized industries is largest for a distance level of 40km or less. Second, several industries in the textile mill products sector are among the most localized, which is similar to findings for the UK, suggesting that there exist common factors across countries determining the concentration of industrial activities. Third, the distribution of distances between entrant (exiting) firms and remaining firms is, in most industries, not significantly different from a random distribution. These results suggest that most industries in Japan neither become more localized nor more dispersed over time and are in line with similar findings by Duranton and Overman (2008) for the UK. Fourth, a comparison with the service sector indicates that the share of localized industries is higher in manufacturing than in services, although the extent of localization among the most localized manufacturing industries is smaller than that among the most localized service industries, including financial service industries.

Keywords: Micro-geographic data; Economic geography; Service sector (search for similar items in EconPapers)
JEL-codes: R11 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (44)

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Related works:
Working Paper: Measuring Economic Localization: Evidence from Japanese Firm-level Data (2011)
Working Paper: Measuring Economic Localization: Evidence from Japanese firm-level data (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:26:y:2012:i:2:p:201-220

DOI: 10.1016/j.jjie.2012.02.002

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