Responding to the recent governmental policies of regional re-creation, local governments try to retain regional economic sustainability. In order to achieve this, it is often said that driving export growth of regional industries and increasing employment are important for regional economic development. This approach is deeply related to the economic base model. Most of the recent empirical studies of this model focus on estimating local employment multipliers generated by tradable industries. Although the multipliers may have spillover effects on other regions, recent studies ignore such spatial elements.
This research estimates local employment multipliers by spatial analysis approaches using data from municipalities and urban employment areas in Japan. We focus on spatial distribution of multipliers and relationships between the degree of multiplier effects and the extent of each local geographical territory. The results show that multiplier effects are higher in urban employment areas than in municipalities. In terms of spatial distribution of multipliers, we find the existence of spatial autocorrelation among municipalities. Suburban cities of the Tokyo metropolitan area have high multiplier effects. In provincial areas, on the other hands, only central cities have high effects.
JEL Classifications:F16, R12, R15
