A New Perspective on Agglomeration Economies in Japan

An Application of Productivity Analysis

This book describes various methods of analysis for ascertaining the effects of agglomeration economies, which are important for formulating regional economic policies. Specifically, it describes new analytical approaches using productivity and productive efficiency analyses as methods for understanding agglomeration economies. Additionally, the book provides application results for Japanese regions and proposes desirable regional policies. According to the new analytical methods advocated in this book, agglomeration economies are larger in major metropolitan areas than in local regions, and in the manufacturing sector than in the non-manufacturing sector. These results are consistent with general knowledge. Moreover, the majority of productivity growth pertaining to regional economies is explainable by improvements to accessibility. Improving accessibility for regions reduces transportation costs between them and strengthens agglomeration economies, which, in turn, enable the sustainable development of regional economies. Therefore, this book highlights the need not only to reinforce existing agglomeration areas, but also to form a network between these agglomerations and to strengthen it, so as to realize regional economic growth despite a decreasing population.