Crises and Changes in Productivity Distributions: A regional perspective in Japan

Author Name ADACHI Yusuke (Kokugakuin University) / OGAWA Hikaru (University of Tokyo) / TSUBUKU Masafumi (Daito Bunka University)
Creation Date/NO. April 2022 22-E-041
Research Project Regional Economy and Roles of Regional Finance in the Post COVID-19 World
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Is there a difference in resilience to crises between urban and rural areas? By using microdata of establishments in the manufacturing industry in Japan from 2007 to 2014, this study estimated how the productivity distribution of establishments in a region changed during two crises caused by different factors: the Global Financial Crisis of 2008 and the Great East Japan Earthquake in 2011. The results indicate the followings. (i) Although establishments in urban areas experienced a larger leftward shift in the productivity distribution than those in rural areas in both crises, their capacity to recover from crises was shown to be greater. (ii) There are several rural areas in which the productivity distribution did not change significantly as a result of crises, where productivity improvement had already stagnated. (iii) In a few rural areas, the distribution of productivity moved to the left during the crises and did not recover afterward, shifting to a different growth path compared to before the crises.