This study proposes a model that analyzes the production quality index using the Frisch index instead of H. Theil’s method. Using this model, an econometrics analysis of the steel industries was conducted in Urayasu, Nagoya, and Matsuyama, each with unique characteristics. The production quality index of co-author Mizuno was previously defined with numerous restrictions. This study generalizes this index to broaden analysis techniques and assess its validity. By evaluating the quality index, this study explored whether there are a greater number of essential input goods or superior input goods. This was then supplemented with interviews to provide insight into the regional steel industry’s production structure. The following observations were made regarding the target region. The majority of the fluctuation in total expenses was due to capital. Urayasu City derived most of its production quality from necessity input goods, whereas cities Nagoya and Matsuyama had a slightly greater proportion of superior input goods than necessity input goods. However, what constitutes a superior input good varied from region to region. In Urayasu city, where regional equipment sharing exists, there were more essential inputs. A comparison of economies of scale and the quality index could determine the regional stability of a given industry. This study supports Shimane’s assertion that the “sharing of business capital” in the steel industry of Urayasu city is achieved by reaching economies of scale through cooperation, as evidenced by both quantitative and interview findings. In other words, intra-regional sharing enables companies to avoid unnecessary capital expenditures and purchases of input goods of superior quality, while increasing production efficiency (synergies) to achieve economies of scale. Compared to Urayasu and Nagoya cities, where large local “steel” industries are formed, Matsuyama city’s steel industry lacks economies of scale and a modest regional advantage. This was reflected in the numerical results and demonstrates that “cooperation” can alleviate the burden of high capital expenditures and increase production efficiency in the Japanese steel industry. This research demonstrates the model’s effectiveness, which is not only limited to the analysis of the three aforementioned cities but is also expected to apply to the analysis of various regional industries and broaden our understanding of econometrics.