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Industrial relocation policy and heterogeneous plants sorted by productivity: Evidence from Japan

Toshihiro Okubo () and Eiichi Tomiura

No DP2010-35, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: In an economic geography model with firm heterogeneity, Baldwin and Okubo (2006) show that regional policies for promoting periphery development attract low-productivity firms and adversely affect the productivity gap within a country. This paper empirically examines their theoretical prediction by using plant-level data during active relocation policies in Japan. Our estimation results from plant-level regressions and propensity-score matching are generally consistent with the theory. As compared to other regions, those targeted by policies, especially by industrial relocation subsidy programs, tend to have low-productivity plants.

Date: 2010-12
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2010-35.pdf First version, 2010 (application/pdf)

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Working Paper: Industrial Relocation Policy and Heterogeneous Plants Sorted by Productivity: Evidence from Japan (2010) Downloads
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