Does human capital or physical capital constrain output in Japanese prefectures?

Hirofumi Fukuyama (), Atsuo Hashimoto (), Kaoru Tone () and William L. Weber ()
Additional contact information
Atsuo Hashimoto: Fukuoka Girls’ Commercial High School
Kaoru Tone: National Graduate Institute for Policy Studies
William L. Weber: Southeast Missouri State University

Empirical Economics, 2018, vol. 54, issue 2, No 3, 379-393

Abstract: Abstract This paper develops a dynamic–network DEA (data envelopment analysis) model where total output is jointly produced from two sectors: a human capital sector and a physical capital sector. Each prefecture produces a final output and an intermediate product which is used to augment future physical capital. The optimization method allows future production possibilities to be enhanced if some final output in the current period is foregone so that larger amounts of the intermediate product can be produced. The goal is to choose the amounts of final output and intermediate product so as to maximize the size of the production possibility set. The method also allows identification of whether output is constrained by a lack of physical capital, a lack of human capital or a lack of both types of capital. We apply our method to 47 Japanese prefectures during the period 2007–2009. A key finding is that a lack of human capital is constraining potential output.

Keywords: Dynamic DEA; Network DEA; Dynamic–network model (search for similar items in EconPapers)
JEL-codes: D24 R11 R15 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s00181-016-1202-5

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