Abstract
Tokunaga, Kageyama and Akune [21] found the existence of a positive effect of agglomeration on production in Japanese manufacturing industries using the index of agglomeration by Ellison and Glaeser [6] and plant-level 4-digit classification panel data from 1985, 1990, 1995 and 2000. In this paper, we examine the existence of agglomeration and co-agglomeration effects on production in the Japanese manufacturing industry using plant-level 4-digit SIC data and agglomeration and co-agglomeration indices for 1985, 1990, 1995 and 2000. This co-agglomeration index was developed by Tokunaga, Kageyama and Akune [20] based on the index by Ellison and Glaeser [6]. Using the flexible translog production function and cost share equation suggested by Kim [12], we found positive effects from agglomeration and co-agglomeration on production in the Japanese manufacturing industry in the absence of any restriction on homotheticity.
JEL Classification: R10, R12, R30
