Industrial Cluster Policy and Transaction Networks: Evidence from firm-level data in Japan

Author Name OKUBO Toshihiro (Keio University) / OKAZAKI Tetsuji (Faculty Fellow, RIETI) / TOMIURA Eiichi (Faculty Fellow, RIETI)
Creation Date/NO. May 2016 16-E-071
Research Project Historical Evaluation of Industrial Policies
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Cluster policy is designed to facilitate inter-firm networking. We examine industrial clusters in Japan based on firm-level transaction data. Firms in clusters expand transaction networks at higher speeds, but do so significantly only with firms agglomerated in Tokyo and not with local firms within the same region. By disaggregating firms according to their main bank types, we find that cluster firms expanding networks are mainly financed by regional banks and not by banks with nationwide operations. This suggests the importance of intensive relationships with main banks for inter-firm network formation.

This is the English version of the Japanese Discussion Paper (15-J-063) with some additional information and changes.

Forthcoming: Okubo, Toshihiro, Tetsuji Okazaki, and Eiichi Tomiura. "Industrial cluster policy and transaction networks: Evidence from firm-level data in Japan," Canadian Journal of Economics Revue Canadienne d’économique.