An Empirical Analysis of Japanese Industrial Agglomeration and Factors of Supply Chain Internationalization in East Asia: A case of Japanese food, electronics, and automobile firms

Author Name TOKUNAGA Suminori  (Reitaku University) /AKUNE Yuko  (Reitaku University) /IKEGAWA Maria  (University of Tsukuba) /OKIYAMA Mitsuru  (Reitaku University)
Creation Date/NO. November 2015 15-P-021
Research Project Studies on the Structure of Japanese Economic Space and Japanese Supply Chains Sustaining Growth Under Globalization and Disaster Risks
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In the first part of this paper, we found positive but weak agglomeration economies resulting from agglomeration and coagglomeration in Japan's manufacturing industry during 1995-2010 using panel data of two-digit and four-digit Standard Industrial Classification of Census of Manufactures and Ellison and Glaeser's (1997) agglomeration index with the same industry and coagglomeration index with different industry groups. On the other hand, in the latter part of this paper, based on the new economic geography (NEG) model, we examined location decision, particularly market potential which appropriate way to take into account the spatial distribution of demand in location choice, supplier access, and agglomeration effects. Especially, we used a Krugman's type market potential using the data of bilateral trade from 1995-2009 in East Asia. After calculating this Krugman market potential and supplier access data, we conducted the logit estimation of country choice of Japanese food, electronics, and automobile firms in 11 East Asia countries including China (mainland), Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand, and Vietnam, and analyzed the determinants of the location choice for Japanese electronics firms. From the estimated results, we found wage, infra, Krugman market potential as market demand and supplier access as market supply, and vertical agglomerations such as Japanese final goods and intermediate goods affiliates agglomeration which show agglomeration economies have affected Japanese industry investment in East Asia.