Industrial Specialization or Diversity? How High-Speed Rail Fosters Japan’s Regional Agglomeration Economy

Jetpan Wetwitoo
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Jetpan Wetwitoo: Asian Development Bank Institute

No 954, ADBI Working Papers from Asian Development Bank Institute

Abstract: We investigate the relationship between high-speed rail (HSR) and agglomeration economy in the scope of specialization and diversity to answer two questions: first, to determine whether specialization or diversity promotes economic productivity, and second, to determine whether HSR promotes specialization or diversity. Specialization/diversity agglomeration index based on the coefficient of variation of localization agglomeration is proposed to measure city’s specialization and diversity. Our analysis utilizes data of agglomeration across 17 industrial sectors in Japanese municipality level. Depending on the definition of agglomeration diversity, one of the results reveals a U-curve relationship as productivity is plotted in Y-axis and specialization agglomeration in X-axis. In other words, both specialization and diversity benefit to economic productivity. Yet, a city which is not specialized and not with a high level of industrial diversity will be the loser in the economy. For the second question, based on the assumption of a quadratic function, HSR could affect city’s specialization and diversity based on the distance to HSR service. From the results, HSR promotes industrial diversity in the city with HSR service, and the city located around 540 km away from HSR service, while HSR promotes city’s specialization in the city located around 270 km away from HSR service.

Keywords: agglomeration economy; diversity; economic productivity; high-speed rail; specialization (search for similar items in EconPapers)
JEL-codes: R11 R30 R40 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2019-05-17
New Economics Papers: this item is included in nep-eff, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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