Productivity change and decomposition analysis of Japanese regional economies

This study examines the productivity growth and its four components for Japanese regional economies by analyzing 47 prefectures for the period 1995-2012. The productivity changes are measured by the Hicks-Moorsteen-Bjurek productivity growth, and the four components consist of technical change, efficiency change, scale change, and input and output mix effects. Data envelopment analysis (DEA) is applied to the measurement. From the results, this study provides two policy recommendations for Japan's new economic growth strategy, which are associated with (1) government support for the diffusion of advanced technology over regions and (2) the creation and development of unique innovation by regional industries.