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

Toshihiro Okubo () and Eiichi Tomiura

No 2011-011, Keio/Kyoto Joint Global COE Discussion Paper Series from Keio/Kyoto Joint Global COE Program

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.

Date: 2011-09
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Journal Article: Industrial relocation policy, productivity and heterogeneous plants: Evidence from Japan (2012) Downloads
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