Uncovering Functional Blocks in Interregional Production Networks: Evidence from Input-Output Linkages in Japan

Shota Fujishima

Papers from arXiv.org

Abstract: This paper examines the latent functional block structure of Japan's production network using interregional input-output data. To isolate non-trivial production linkages, we first estimate a structural gravity model to account for spatial frictions and economic scale, and then apply a weighted stochastic blockmodel (SBM) to the resulting residual network. Because these residual linkages often connect distant regions, the SBM is well suited to grouping region-industry pairs based on their shared macroeconomic roles. The results reveal that even after explicitly filtering out the mechanical effects of geographic proximity, the network is organized into functional blocks that maintain a high degree of regional coherence. Beyond this baseline spatial clustering, we find evidence of cross-regional integration, a structural bifurcation between manufacturing and urban services in metropolitan areas, and broadly spanning primary sectors. These findings provide a network-based perspective on regional coordination, offering guidance for how structurally defined production blocks-rather than simple geographic proximity-can inform wide-area policy design.

Date: 2026-03
New Economics Papers: this item is included in nep-geo, nep-net and nep-uep
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2603.25300 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2603.25300

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().