This paper examines the use of location quotients （LQ） for constructing regional input-output tables from national input-output tables. The focus is on the modified FLQ formula proposed by Flegg and Webber （1997） and augmented version of the AFLQ formula proposed by Flegg and Webber （2000）.
China consists of 31 municipalities, provinces and autonomous regions （excluding Hong Kong and Macau）. China regions range in size from very small （Qinghai and Ningxia, 0.3% in GDP） to relatively large （Guangdong, 11.3% in GDP）. It is very useful to verify the effectiveness of regionalization method from national input-output table to regional input-output table, for constructing small regional input-output table at the city or prefectural level in future analyses.
This paper tests the regionalization method with location quotients such as Location Quotient （LQ）, Cross Industry Quotient （CIQ）, Flegg’s Location Quotient （FLQ） and an augmented FLQ （AFLQ） by using China national input-output tables, and examines the accuracy of the output multiplier derived by the estimated regional input-output tables when compared with survey-based Provincial input-output tables.
The results showed that the LQ and CIQ of 10 provinces （one third of total region） are better than FLQ, and AFLQ gives better estimates in all regions under the appropriate δ value than LQ and CIQ. However, a reasonable value for δ as discussed in the previous research would be 0.05-0.075 for FLQ and 0.15 for AFLQ based on the average from my empirical evidence. The relative low value of δ and its valiance implies that regional size may not be very important.
In conclusion, AFLQ should be used to construct small regional input-output tables at the practical level.

JEL Classification:O53, R10, R15

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This paper analyses the political economy of environmental policies in the presence of an eco-industry pressure group. Previous studies deal with two kinds of lobbiests: capitalists and environmentalists. We introduce into the process a third pressure group representing the eco-industry sector. An incumbent government maximizes its chances of being reelected with an objective function that includes both social welfare and political contributions. Introduction of the eco-industry lobby introduces new political contributions and modifies the incentives of the traditional lobbiests.
We suppose an open economy context. In two countries, two polluting sectors are subject to an environmental policy. Therefore, an eco-industry sector that supplies polluting firm abatement goods and services arises. Abatement goods and services are assumed internationally traded, creating the only industrial interaction between the two countries. Pollution affects consumers in both countries and can be transboundary or purely local. Both cases are analyzed.
Our main findings can be summarized as follows. Eco-industries will lobby in favor of more stringent environmental policies unless the impacts of foreign competition more than compensate for the increase in turnover that a tighter environmental policy induces. Polluting firms always lobby against tighter environmental policies.

JEL Classification: F12, H23, Q58

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In this study, we conducted an empirical analysis of the impacts of social overhead capital, population agglomeration and industry structure on productive efficiency, focusing on Japan’s 47 prefectures. The analysis results showed that upgrading social overhead capital contributes to improved regional productive efficiency. At the same time, the economic effect of population agglomeration was clearly shown to increase productive efficiency. Moreover, regions that are heavily weighted toward manufacturing were shown to have high productive efficiency.
After investigating the degree to which each factor contributes to productivity gains in each region, it became clear that the largest contributor was industry structure. In other words, the transformation of industry structure appears to be indispensable for the sustainable development of regional economies. At the same time, upgrading social overhead capital was shown to contribute to some degree to such sustainable development. Meanwhile, high population agglomeration appeared to have a powerful economic effect in major metropolitan areas, such as Tokyo Metropolitan Area and Kansai. Due to its significant external effect, population agglomeration is predicted to realize economies of scale in Tokyo and Osaka.
This study demonstrated that upgrading social overhead capital has an effect on increasing productive efficiency, in addition to previously understood effects on productivity. Upgrading regional social overhead capital drives sustainable growth in regional economies through increases in productivity. Future studies should address regional analysis at a more detailed level, such as at the level of municipalities.

JEL Classification: R11, R30, R38

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This paper discusses the bad reputation effect of processed food brought about by the Fukushima nuclear accident in 2011. Although various discussions have focused on the economic and other impacts of the disaster, unfortunately the bad reputation effect has not been adequately dealt with. This paper analyses the relationships between the distance from the nuclear power plant to the production place and the prices of the same processed food produced in different places.

JEL Classification: H23, O13, Q43, Q51

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In order to contribute to planning woody biomass promotion policies, biomass utilization projects should be assessed not only for economic feasibility, but also for resource availability and environmental performance. Especially, estimates of the amount of resources available are important for carrying out the projects. Without this, the projects may have difficulties procuring resources, and environmental and economic performance would not be achieved for the targets. There are numerous studies on assessment of biomass projects from viewpoints of resource availability, and environmental and economic performance. However, most of these studies have been conducted on each aspect individually.
In this study, we proposed a new assessment tool for woody biomass projects. The tool includes estimation of the amount of available woody resources and matching with supply and demand, as well as assessment of both environmental and economic performance. As a case study, we applied the tool to a project for firewood promotion in Nishiwaga, Japan. Using the tool, we estimated the amount of available woody resources and the transport costs for the resources by using a Geographic Information System, and matched the resources with demand and supply by using linear programming, and finally calculated the greenhouse gas balance and economic impacts both on a household and on the local economy.
From the results, we found that only 36% of the woody biomass resources were actually available in Nishiwaga, and there was enough wood resource supply to cover the demands for firewood in Nishiwaga.　However, we also found that when we looked at each community, some communities would have to import woody resources from other communities in the town within the next ten years even if they had enough resources available in their communities. This is because it would be much cheaper to import than to supply domestically. In terms of environmental performance, the amount of GHG reduction was 1.9 CO₂-t per household per year. From the economic aspect, converting from kerosene to firewood can increase money flow in the town and induce a positive economic impact on the local economy.
From the case study, we found that it is important to understand not resource potential but resource availability to ensure resource procurement and it is also important to look at spatial constraints and transportation costs of resources as well as resource availability. All these aspects are considered in the tool proposed in this study. This tool can be applied not only to woody biomass but also to other types of biomass for energy. We believe the tool can contribute to more practical policy making for local resource use.

JEL Classification: Q23, Q57, Q59

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In Japan, the society has undergone rapid aging and falling birthrates, and issues for solving problems of health and improving quality of life have become diversified and complicated. For realizing sustainability of regional development, the issues of innovative creation has become urgent along with the progress of globalization and tightening constraints on the environment and resources.
This study aimed to build a theoretical model for regional innovation based on the strategy of collaborative advantage and empirically clarify the policy issues for regional innovation focusing on the “health-related industry cluster” in Niigata Prefecture, Japan. More specifically, we clarified the situation of the “health-related industry cluster” and impacts of spatiality on knowledge flow in the regional innovation system based on interview surveys of intermediate organizations and questionnaires targeting the members of the cluster.　Additionally, we identified the relationships between cognitive distance of inter-firms and innovation creation based on the analysis of annual security reports of three leading companies in the cluster using the TF-IDF (Term Frequency-Inverted Document Frequency) method. Finally, we draw policy implications for strategies of regional innovation based on the analytical results.

JEL Classification:O30, R58

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By applying a structure path analysis to a two-region social accounting matrix, this study indicated that a rise in the water supply in Shanghai would allow many non-water sectors both in Shanghai and other regions to significantly improve. By testing five hypotheses, the results further illustrated that a direct effect significantly contributed most of the increase in the output of production in Shanghai, especially for the electric power and general industry sectors, when Shanghai’s water supply was available. Direct effects were also significant in terms of the influence of the water supply in Shanghai on the factorial income of labor in Shanghai. For urban and rural households, additional income basically came from additional employment of general labor workers, but urban households benefited from more diverse paths than rural households to yield this increase. In Shanghai, the electric power and general industry sectors were the most important intermediate poles within the paths with more than one intermediate pole transmitting a significant part of the global influence as indirect effects. Furthermore, electric power acted as a crucial intermediate pole, working in indirect cross-regional paths to create a significant relationship between the water supply in Shanghai and sectors in other regions.

JEL Classification: C63, R11, R58

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The purpose of this study was to examine the relationships between expansion of rural business and characteristics of local agriculture in hilly and mountainous areas.
To capture the relationships, we focused on the roles of rural community-level agglomeration of rural business in the geographic range of communities organized during the Meiji Period in Shimane Prefecture.
Using community data obtained from the Census of Agriculture and Forestry, and data from the direct payment policy to the hilly and mountainous areas, we examined the relationships in terms of community-level cooperation.
Then, we confirmed that off-farm cooperation, community business factors, flexibilities of labor allocation, and farmland utilization positively contributed to change in rural business. In addition, we also confirmed that restrictive conditions in the community, shared use of machines, and geographical factors such as mountainous settlements negatively contributed to the change. These findings indicate it is important to connect the interregional and intra human resources to improve sustainability in hilly and mountainous areas.

JEL Classification:Q13, Q18, R11

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