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

Toshihiro Okubo, Eiichi Tomiura

Research output: Contribution to journalArticle

11 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)230-239
Number of pages10
JournalRegional Science and Urban Economics
Volume42
Issue number1-2
DOIs
Publication statusPublished - 2012 Jan 1

Keywords

  • Industrial relocation policy
  • Plant-level data
  • Productivity
  • Subsidy

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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