Regional Policy and the Productive Efficiency of Japanese Industries

Akihiro Otsuka and Mika Goto

Regional Studies, 2015, vol. 49, issue 4, 518-531

Abstract: Otsuka A. and Goto M. Regional policy and the productive efficiency of Japanese industries, Regional Studies . This paper examines the impacts of agglomeration economies and fiscal transfer on productive efficiency in Japanese regional industries. Two popular methodologies are applied - stochastic frontier analysis (SFA) and data envelopment analysis (DEA) - 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; and (4) the importance of agglomeration economies for regional industries has increased in recent years. Based on these results, this paper discusses effective regional policy for Japan.

Date: 2015
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DOI: 10.1080/00343404.2013.795285

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