Industrial relocation policy, productivity and heterogeneous plants: Evidence from Japan

Toshihiro Okubo and Eiichi Tomiura

Regional Science and Urban Economics, 2012, vol. 42, issue 1-2, 230-239

Abstract: Do regional policies for promoting periphery development attract high- or low-productivity firms? Though whether policies improve the core-periphery productivity gap hinges on this question, no consensus is found in theoretical models. This paper uses plant-level data covering all regions in Japan during the period of active relocation policies. Our estimation results from plant-level regressions and propensity-score matching show that the average productivity of plants is significantly low in regions targeted by relocation policy programs. By comparing productivity distributions across plants before and after the start of each policy program, we find that low-productivity plants are attracted to targeted regions.

Keywords: Industrial relocation policy; Subsidy; Productivity; Plant-level data (search for similar items in EconPapers)
JEL-codes: H32 R12 R58 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Working Paper: Industrial relocation policy, productivity and heterogeneous plants: Evidence from Japan (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:42:y:2012:i:1:p:230-239

DOI: 10.1016/j.regsciurbeco.2011.09.004

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