2019 Volume 49 Issue 2 Pages 185-197
Productivity of workers is much different among the regions involved. We used to believe that the regional economic performance largely depends on the activities of manufactures. However, most of the advanced countries have a low correlation coefficient between per capita income and the share of manufactures. In the 21st century, we have recognized that improvements in the non-manufacture sectors must be needed for Japanese economic recovery.
From the above point of view, I will adopt the I-O analysis about Hokkaido economy, which has much larger share of service-products than the average of Japan. I will compromise the I-O table into the two-sectors, the physical good-producing sector and the service-production sector, deriving the various characteristics of Hokkaido economy. The fundamental equation of the divided I-O model is the following;
The relation of industrial structure and productivity, the factors of productivity difference, as well as the role of service sector activity for the regional economy are to be inquired. By using the I-O analysis, we can see to what extent an activity of some sector has an effect on the activities of other sectors. In short, the object of this study is to extract the role of service sector activities played in the regional economy, especially in terms of the productivity of the regional production.
In Hokkaido, the share of service sector has grown faster than the average of Japanese economy. Using the above partitioned I-O model, we can show not only that the internal multiplier of the good-producing sector has decreased but also that the external effect of the service sector activities on improving manufacture has not been significant. These results are much more notable in Hokkaido than those in the entire Japan.
JEL Classifications:L3, O4, R2
