Changes in Japanese industrial structure and urbanization: evidence from prefectural data

Abstract

We empirically analyzed the relationship between the change in industrial structure and urbanization using post-WWII data from Japanese prefectures. This study used three concepts of industrial structure, standard industrialization (enhancing of the non-agricultural sector), service industrialization, and the industrial upgrading (enhancing specialized service industries). We also focused on the different patterns of migration in the process of urbanization: intra-prefectural and inter-prefectural migration. The main results of the regression analysis are (1) during the period of rapid economic growth in Japan, industrialization induced population inflow from other prefectures, and this effect promoted urbanization in those prefectures. (2) During the same period, prefectures with relatively high shares of manufacturing attracted many migrants from other prefectures, and this effect promoted the urbanization. (3) Entering the period of economic stagnation, in the prefectures where industrial upgrading is advanced, intra-prefectural migration was active, and urbanization was also advanced by this effect.

Keywords:

• industrialization
• service industry
• industrial upgrading
• urbanization
• migration

JEL classifications:

• O14
• O18

Acknowledgements

I would like to acknowledge support and encouragement of Professor Jun Zhang (Fudan University), Professor Wan-Wen Chu (Academia Sinica), and other participants of Workshop on Economic Development and Industrial Upgrading: East Asia and China.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. Because each prefecture is essentially administratively independent, the amount of inter-prefectural migration that accompanies the change in population in that prefecture is an important matter for the local government.

2. The population decline may be the main reason why the urbanization of Shimane Prefecture has not advanced. The population of Shimane decreased by as much as 19.3% between 1960 and 2010 (by contrast, the total population of Japan increased by 35.8% during the same period).

3. The weighted average (the proportion of value added for secondary and tertiary industries in the total value added) was 83.0% in 1955 and 98.9% in 2010.

4. The reason for the decrease in industrial upgrading may be brought about by the differences in the data used (the data for 2005 came from R-JIP and the data for 2010 was an estimation by us using prefectural accounts). To consider this possibility, we calculated the industrial upgrading rate in 2008 (most recent year available in R-JIP). The result was 17.6%, so we can reconfirm a clear decreasing tendency in the industrial upgrading rate, compared with 18.9% in 2005.

5. There is also the bilateral or simultaneous causality between the industrial structure and urbanization through, for example, the agglomeration effect (Gill and Goh 2010; Duranton 2013).

6. See Table A1 in the Appendix 1 for the prefectures that belong to each region and MA.

Additional information

Notes on contributors

Naoki Murakami

Naoki Murakami's institutional affiliation is Nihon University Population Research Institute. His research interests are Chinese economy, industrial economics. His recent publications include Governance and Development of Chamber of Commerce, 2014; A Comparative Study of Industrialization Process in China and Japan, 2013 and Capital Market and Rating Agencies in Asia (as a contributor), 2012.