Regional Disparity of Productivity and the Factors in Japanese Industries

Abstract

This study examines productivity change and the factors of regional industries in Japan using a data set consisting of 47 prefectures over the period from 1990 to 2009. The data set is comprised of one output and five inputs for manufacturing and non-manufacturing industries; amount of real term production as an output and intermediate input, number of employees, private capital stock, social capital stock and final energy consumption as inputs. Using the data set, we measure Hicks-Moorsteen-Bjurek (HMB) productivity index proposed by Nemoto and Goto (2005). The advantage of the HMB productivity index compared with the other popular productivity indexes such as Törnqvist productivity index and Malmquist productivity index is that the former can be fully decomposed into factors to explain the productivity change over time. To calculate the HMB productivity index, this study measures the distance functions by applying a data envelopment analysis (DEA). From the results, this study indicates regional disparity has gradually expanded among regions, particularly after 2003. We show the increased disparity can be attributed to the reduced level of social capital investment for rural areas since 2000’s. Finally this study discusses desirable regional policy in Japan.

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Author Information
Mika Goto, Tokyo Institute of Technology, Japan
Akihiro Otsuka, Central Research Institute of Electric Power Industry, Japan
Toshiyuki Sueyoshi, New Mexico Institute of Mining & Technology, USA

• Category: Economic Sustainability: Environmental Challenges and Economic Growth

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