Sources of productivity improvement in industrial clusters: The case of the prewar Japanese silk-reeling industry

Yutaka Arimoto, Kentaro Nakajima, Tetsuji Okazaki

Research output: Contribution to journalArticlepeer-review

13 Citations (Scopus)

Abstract

We examine two sources of productivity improvements in localized industrial clusters of the silk-reeling industry in prewar Japan. Agglomeration improves the productivity of each plant through positive externalities which shift plant-level productivity distribution to the right. Selection expels less productive plants through competition, which truncates the distribution on the left. We find evidence of agglomeration effects that benefit less productive plants and selection effects in clusters. Here, a cluster is defined by the density of own-industry plants within an area. The results complement previous studies that find positive agglomeration effects in the most productive firms, but no selection effects in cities (Combes et al., 2012; Accetturo et al., 2011). Our results suggest that the sources of productivity improvements in localized industrial clusters might be different from those in cities.

Original languageEnglish
Pages (from-to)27-41
Number of pages15
JournalRegional Science and Urban Economics
Volume46
Issue number1
DOIs
Publication statusPublished - 2014 May

Keywords

  • Agglomeration
  • Heterogeneous firms
  • Productivity
  • Selection

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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