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Impacts of industry clusters with innovation on the regional economy in Japanese depopulating society after the Great East Japan Earthquake

Author

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  • Suminori Tokunaga

    (Reitaku University)

  • Mitsuru Okiyama

    (Reitaku University)

Abstract

In this paper, we will take the concepts of Porter’s (On competition. Harvard Business School Press, Cambridge, 1998, Econ Dev Q 14(1):15–34, 2000) clusters and present an analysis of the feasibility of economic development in Japanese disaster regions under rapid population decline, utilizing two new industry clusters with innovation. The two clusters used are the automobile industry cluster, which targets the entire disaster region and whereby innovation comes from coagglomeration with different industries in mega-regions, and the food industry cluster, which target individual disaster-struck prefectures, focusing on their leveraging of local resources. This paper applies the dynamic two-regional computable general equilibrium model. We construct scenarios for each of these two clusters, and evaluate each new industry cluster model’s economic effects on disaster regions. A simulation analysis for scenarios of these two new clusters with positive and higher productivity in the coagglomerated industries reveals the following two effects: (1) that economies of agglomeration attained from vertical and horizontal coagglomeration have the effect of boosting real GRP and productivity on the macro level when the two new industry clusters are formed jointly rather than individually, and (2) that they contribute to long-term sustained growth in disaster region economies, reducing the gap between their growth and that of other regional economies. This can be interpreted to mean that the usual policies adopted, such as subsidies and corporate tax cut policies, are unable to counteract economic stagnation that comes as a result of a sharp decline for population numbers in disaster regions; it offers a conclusion that the agglomeration externalities seen from improved productivity in the formation of the new food/automobile industry clusters can offer sustained economic development in disaster regions.

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  • Suminori Tokunaga & Mitsuru Okiyama, 2017. "Impacts of industry clusters with innovation on the regional economy in Japanese depopulating society after the Great East Japan Earthquake," Asia-Pacific Journal of Regional Science, Springer, vol. 1(1), pages 99-131, April.
    • Handle: RePEc:spr:apjors:v:1:y:2017:i:1:d:10.1007_s41685-017-0041-5
    DOI: 10.1007/s41685-017-0041-5
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    Cited by:

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    2. Yoji Kunimitsu & Gen Sakurai & Toshichika Iizumi, 2020. "Systemic Risk in Global Agricultural Markets and Trade Liberalization under Climate Change: Synchronized Crop-Yield Change and Agricultural Price Volatility," Sustainability, MDPI, vol. 12(24), pages 1-17, December.
    3. Fang, Jing, 2020. "Prediction and analysis of regional economic income multiplication capability based on fractional accumulation and integral model," Chaos, Solitons & Fractals, Elsevier, vol. 130(C).
    4. João Romão & Peter Nijkamp, 2017. "Special issue on innovation and ecology: regional science perspectives on spatial systems," Asia-Pacific Journal of Regional Science, Springer, vol. 1(1), pages 49-52, April.

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    More about this item

    Keywords

    New industry cluster; Coagglomeration; Economies of agglomeration; Innovation; Dynamic two-regional computable general equilibrium (D2SCGE) model; Reconstructing from the Great East Japan Earthquake;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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