Along with various environmental concerns, Japan has an important policy issue arising from the development of its economies. The issue is how to simultaneously attain regional economic growth and energy efficiency. This study has examined impacts of agglomeration economies on energy efficiency of Japanese manufacturing industries. Using a prefecture-level panel data set from Energy Consumption Statistics, this study identifies the following three empirical findings. First, the productivity growth has improved energy efficiency, but not vice versa. Second, agglomeration economies, which are a driving force for productivity growth, have improved the energy efficiency of Japanese manufacturing industries. Finally, localization economies by agglomerating similar industries are effective in improving the energy efficiency in rural areas. The third finding is consistent with many previous studies, claiming that agglomeration economies based on localization occur for many medium-sized cities. The result implies that it is an important policy direction for Japan to formulate mediumsized cities in rural areas than large metropolitan cities in terms of improving the energy efficiency of manufacturing industries. JEL classification: Q40, Q50, R10
Abstract. This study examines whether agglomeration economies, market access and public fiscal transfer have a positive or negative influence on the productive efficiency of Japanese regional industries. To attain the research objective, stochastic frontier analysis is applied to a Japanese data set at a prefecture level which consists of estimated spatial and industrial economic activities from 1980 to 2002. An empirical result obtained in this study indicates that both the agglomeration economies and the improvement of market access have a positive influence on the productive efficiency of Japanese manufacturing and non-manufacturing industries. In contrast, the public fiscal transfer has a negative impact on the productive efficiency. These findings indicate that many prefectures (corresponding to States in the United States), which are characterized by weak market access and/or high dependence on public fiscal transfer, are often associated with their low productive efficiency.
JEL classification: R11, R30, R38
In response to increased environmental constraints, it has become an important policy issue for Japan to improve energy efficiency for the future, along with the growth of regional economies. This paper uses a stochastic frontier model to estimate the energy demand function and analyse the levels and determinants of energy efficiency. The empirical analysis conducted by using data from 47 prefectures in Japan revealed the following four findings. First, the proposed energy efficiency measure (calculated using the stochastic frontier model) is found to be effective, as its ranking is highly correlated with that of energy intensity. Second, increasing population density is effective in improving energy efficiency. Third, improving regional accessibility by developing a highway network helps to improve the energy efficiency in Japan. Fourth, the level of energy efficiency is deteriorating in areas where raw material industries are clustered. These results indicate that the means to increasing both economic productivity and environmental efficiency are to implement a regional decentralization policy by creating major urban areas across the nation and expand a wide-area transportation network to link these areas. In addition, the promotion of technological innovations through appropriate environmental regulations is important to advance such regional policies.JEL classification: Q40, Q50, R10
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