INDUSTRIAL STRUCTURE OF PREFECTURES IN JAPAN
Department of Management and Information Sciences, Faculty of Environmental and Information Sciences, Fukui University of Technology, Fukui, Japan
ABSTRACT
I would like to highlight two local prefectures in Japan, Fukui prefecture and Toyama prefecture. I live in Fukui prefecture and it has Toyama as the neighbor. This research uses 2011 Input-Out Tables of Fukui and Toyama prefectures and examines "the index of power of dispersion" and "the index of sensitivity of dispersion" of each industry. It also gets the production inducement values by consumption, investment, and export (and outflow to other prefectures). With these values, we can compare the two prefectures’ industrial structure. The values of the index of power of dispersion show some different industries in higher ranked industries, which have bigger economic effect. Moreover, "Information and communications" industry is ranked at the seventh in Fukui and "Iron and Steel" industry has the eighth position in Toyama. On the other hand, the index of sensitivity of dispersion’s values indicate that the industries at higher rank have similarity though the rankings are somewhat different. In addition, "Finance and insurance" is ranked at the sixth in both Fukui and Toyama. "Real estate" industry has the seventh and the eighth position in Fukui and Toyama respectively. Seeing the inducement effect of export and outflow to other prefectures, Fukui’s "Electricity, Gas, and Heat supply" industry and Toyama’s "Chemical products" industry have outstanding values. Furthermore, two industries characterize Fukui and Toyama about the effect to employment. That is to say, the third ranked industries are "Textile mill products" and "Fabricated metal products" respectively. Fukui and Toyama are in the same area, we call Hokuriku. However, they don’t necessarily have the same industrial structure.
Keywords:Input-out table, Iindex of the power of dispersion, Index of the sensitivity of dispersion, Production inducement, Consumption, Investment, Export.
ARTICLE HISTORY: Received: 26 June 2017, Revised: 8 September 2017, Accepted: 18 October 2017, Published: 30 November 2017
Contribution/ Originality: The paper's primary contribution is finding that the index of power of dispersion shows some different industries in Fukui and Toyama. Seeing the production inducement effect, Fukui’s and Toyama’s first rank industries are "Electricity, Gas, and Heat supply" and "Chemical products" respectively.
This article utilizes Input-Output Tables which interest us. They are very important and useful for the analysis of industrial structure and for economic forecasting. Ronald and Blair [1] indicate that Dr. Leontief developed Input-Output Tables in late 1930s. He won Nobel Prize in Economics for it in 1973. About this Input-Output Tables, "Leontief’s Inverse Matrix" is the most crucial tool, which is derived from Input-Output Tables, when calculating the various indexes related to industries. Using 2011 Input-Out Tables of Fukui and Toyama prefectures in Japan, which are the most recent version published in 2015, this research discussed "the index of power of dispersion" and "the index of sensitivity of dispersion" of each industry. Furthermore, it calculated the production inducement by consumption, investment, and export (and outflow to other prefectures), the ripple effect to value added, and the ripple effect to employment to compare the industrial structure of the two prefectures. About the following model and calculation method, see Sadao [2]; Leontief [3] and The Ministry of Internal Affairs and Communications of Japan [4].
To simplify, if a national economy is deemed to be comprised only of Industry 1 and Industry 2, the Basic Transaction Table may be as indicated in Table 1.
Table-1. Basic Transaction Table
Industy 1 |
Industy 2 |
Final demand |
Import |
Domestic production |
|
Industy 1 | x11 |
x12 |
F1 |
-M1 |
X1 |
Industy 2 | x21 |
x22 |
F2 |
-M2 |
X2 |
Gross value added | V1 |
V2 |
|||
Domestic production | X1 |
X2 |
Source: The Ministry of Internal Affairs and Communications of Japan [5]
This model divides final demand (F) into domestic final demand (Fd) and export (E). It gives the following equation:
The figures in a column in the inverse matrix coefficient (11) indicate the productions required at every sector when the final demand for a sector (that is, demand for domestic production) increases by one unit. The vertical sum of a column indicates the scale of "production repercussions on entire industries", which is caused by one unit of the final demand for a sector. The vertical sum of a column of the inverse matrix coefficients is divided by the mean value of the vertical sum of columns to produce a ratio. This ratio indicates "the relative magnitudes of production repercussions on entire industries when the final demand for a sector increases by one unit." This is called the "Index of Power of Dispersion" (Shuntarou [6]).
The figures for a row in the inverse matrix coefficient (11) indicate the supplies required at a sector when one unit of the final demand for all sectors occurs respectively. The ratio produced by dividing the total (horizontal sum) by the mean value of the horizontal sum of rows will indicate the relative influences, that is to say, "the relative magnitudes of production inducement of a sector when one unit of the final demand for all sectors occurs". This is called the "Index of Sensitivity of Dispersion" (Shuntarou [6]).
Figure-1. Relationship between Power of Dispersion and Sensitivity of Dispersion
Source: Fukui Prefecture [7]; Toyama Prefecture [8]
Only "Electricity, Gas, and Heat supply" industry exceeds "1" concerning both the value of power of dispersion and the value of sensitivity of dispersion in Fukui (Figure 1, the first quadrant). On the other hand, "Government services ", "Medical and Social welfare services", "Chemical products", "Electronic parts", "Non-Ferrous metals " and "Production-use machinery "industries have lower values of both the power of dispersion and the sensitivity of dispersion (the third quadrant).
In Toyama, "Electricity, Gas, and Heat supply", "Non-Ferrous metals " and "Construction" exceed "1" regarding both the value of power of dispersion and the value of sensitivity of dispersion (the first quadrant). The values of "Government services ", "Medical and Social welfare services", "Chemical products", "Professional and business services", and "Production-use machinery "are lower than "1" concerning both the value of power of dispersion and the value of sensitivity of dispersion (the third quadrant). In particular, as we can see in the second quadrant, the positions of the two prefectures’ industries are similar.
Table-2. Index of power of dispersion
1 | 2 | 3 | 4 | 5 | |
Fukui | Mining | Petroleum and Coal | Beverages and Food | Water | Office and Store fixtures |
1.2681 | 1.1504 | 1.1244 | 1.1145 | 1.1055 | |
Toyama | Mining | Non-Ferrous metals | Office and Store fixtures | Water | Electricity, Gas, and Heat supply |
1.1619 | 1.1286 | 1.1181 | 1.1048 | 1.0757 | |
Japan | Iron and Steel | transportation equipment | Office and Store fixtures | fabricated metal products | Plastic and Rubber products |
1.4534 | 1.4468 | 1.3980 | 1.1192 | 1.1487 |
(continued)
6 | 7 | 8 | 9 | 10 | |
Fukui | Electricity, Gas, and Heat supply | Information and communications | Personal services | Pulp, paper and wood products | Textile mill products |
1.0835 | 1.0586 | 1.0330 | 1.0246 | 1.0107 | |
Toyama | Electronic parts | Miscellaneous manufacturing | Iron and Steel | Pulp, paper and wood products | Other non-metallic mineral products |
1.0554 | 1.0524 | 1.0432 | 1.0402 | 1.0350 | |
Japan | Chemical products | General –purpose production machinery | Pulp, paper and wood products | Electrical machinery | Information and communication |
1.1477 | 1.1380 | 1.1367 | 1.1280 | 1.1213 |
Source: Fukui Prefecture [7]; Toyama Prefecture [8]; The Ministry of Internal Affairs and Communications of Japan [9]
Table 2 and 3 show the values of power of dispersion and the values of sensitivity of dispersion according to their height. As we can see in Table 2, about the power of dispersion, the second, the third, and the fifth rank are different from each other in the two prefectures. "Petroleum and Coal products" industry which is the second rank in Fukui is the sixteenth rank in Toyama. "Non-Ferrous metals" which is the second rank in Toyama is the twenty-seventh rank in Fukui. Moreover,
"Information and communications" industry is ranked at the seventh in Fukui and "Iron and Steel" industry has the eighth position in Toyama.
About the sensitivity of dispersion, the first and the second of the two prefectures are replaced each other. The difference between the first rank and second rank is smaller in Fukui compared to Toyama. As far as we see the higher rank industries, Fukui’s industries tend to be needed from other industries. Moreover, "Finance and insurance" is ranked at the sixth in both Fukui and Toyama. "Real estate" industry has the seventh and the eighth position in Fukui and Toyama respectively.
As shown in Table 2 and 3, about the whole country, "Iron and Steel" industry’s rank is the first and the second respectively. "Iron and Steel" industry of the two prefectures is not ranked at higher position, in particular, Fukui prefecture.
Table-3. Index of sensitivity of dispersion
1 | 2 | 3 | 4 | 5 | |
Fukui | Transport and postal activities | Professional and business services | Commerce | Electricity, Gas, and Heat supply | Information and communications |
2.1647 | 2.1043 | 1.9889 | 1.4214 | 1.2847 | |
Toyama | Professional and business services | Transport and postal activities | Commerce | Electricity, Gas, and Heat supply | Information and communications |
2.1933 | 1.8078 | 1.7744 | 1.4117 | 1.2337 | |
Japan | Professional and business services | Iron and Steel | Commerce | Transport and postal activities | Chemical products |
2.6425 | 2.3394 | 2.1374 | 1.8497 | 1.4986 |
(continued)
6 | 7 | 8 | 9 | 10 | |
Fukui | Finance and insurance | Real estate | Construction | Education and Scientific research | Public services |
1.2225 | 1.0928 | 1.0376 | 1.0000 | 0.9890 | |
Toyama | Finance and insurance | Non-Ferrous metals | Real estate | Education and Scientific research | Construction |
1.2229 | 1.1233 | 1.1164 | 1.0673 | 1.0532 | |
Japan | Information and communications | Pulp, paper and wood products | Electricity, Gas, Heat supply | Petroleum and Coal | Education and Scientific research |
1.3918 | 1.3270 | 1.2600 | 1.1710 | 1.1151 |
Source: Fukui Prefecture [7]; Toyama Prefecture [8]; The Ministry of Internal Affairs and Communications of Japan [9].
We can’t see the difference between the two prefectures when seeing the top rank industries about the inducement effects to production, value added, and employment by consumption and investment. Therefore, here I focus on outflow to other prefectures and export as final demand concerning the effect to production, value added and employment.
We can define "Production inducement coefficient" (PIC) by final demand item as the domestic products induced by individual final demand item (e.g. consumption) which is divided by the total for corresponding final demand (e.g. consumption). This indicates the rate of increase of domestic production of an industry by a final demand item for all industries divided by the "total" of a certain final demand item for all industries, which means per unit of a certain final demand item. That is to say, Production inducement coefficient is the per unit magnitude of "Production inducement" in an industry. In other words, the production ripple power of each final demand item (consumption, investment, and export) for an industry per unit of each final demand.
For example, an industry’s PIC of the consumption is:
Here, X` is the domestic products of an industry induced by the consumption for all industries. C is the total of consumption for all industries.
Table 4 shows production inducement amount (X` above, unit: million yen) by outflow and export. Moreover, the values of Table 5 are Production inducement coefficient by outflow and export. "Electricity, Gas, and Heat supply" is ranked as the first respectively in Fukui prefecture. Toyama’s the first rank industry is "Chemical products" in both Tables. "Electronic parts" is ranked at the second in Fukui and the forth in Toyama. "Non-Ferrous metals" has the second position in Toyama and the sixth in Fukui. Moreover, Japan’s top five industries fairly differ from the industries of Fukui and Toyama.
Table-4. Production inducement amount by outflow and export (million yen)
1 | 2 | 3 | 4 | 5 | |
Fukui | Electricity, Gas, and Heat supply | Electronic parts | Chemical products | Textile mill products | Commerce |
537,717 | 326,760 | 315,018 | 218,598 | 60,372 | |
Toyama | Chemical products | Non-Ferrous metals | Production machinery | Electronic parts | Commerce |
711,137 | 464,475 | 408,344 | 340,454 | 338,936 | |
Japan | Transportation equipment | Iron and Steel | Commerce | Transport and postal activities | Chemical products |
24,804,262 | 15,650,951 | 13,786,483 | 10,274,393 | 9,049,729 |
(continued)
6 | 7 | 8 | 9 | 10 | |
Fukui | Non-Ferrous metals | Professional and business services | Transport and postal activities | Rubber and plastics product |
Miscellaneous manufacturing |
138,005 | 125,968 | 109,440 | 99,811 | 98,257 | |
Toyama | Fabricated metal products | Transport and postal activities | Iron and Steel | Pulp, paper and wood products | Professional and business services |
275,688 | 214,595 | 212,853 | 186,848 | 169,767 | |
Japan | Professional and business services | Electronic parts | Production machinery | Electrical machinery | Non-Ferrous metals |
8,819215 | 8,776,209 | 7,001,764 | 6,281,151 | 5,067,127 |
Source: Fukui Prefecture [7]; Toyama Prefecture [8]; The Ministry of Internal Affairs and Communications of Japan [5]
Table.5. Production inducement effect by outflow and export (coefficient)
1 | 2 | 3 | 4 | 5 | |
Fukui | Electricity, Gas, and Heat supply | Electronic parts | Chemical products | Textile mill products | Commerce |
0.2426 | 0.1474 | 0.1421 | 0.0986 | 0.0724 | |
Toyama | Chemical products | Non-Ferrous metals | Production machinery | Electronic parts | Commerce |
0.1993 | 0.1302 | 0.1144 | 0.0954 | 0.0950 | |
Japan | Transportation equipment | Iron and Steel | Commerce | Transport and postal activities | Chemical products |
0.3496 | 0.2206 | 0.1943 | 0.1448 | 0.1276 |
(continued)
6 | 7 | 8 | 9 | 10 | |
Fukui | Non-Ferrous metals | Professional and business services | Transport and postal activities | Rubber and plastics product |
Miscellaneous manufacturing |
0.0622 | 0.0568 | 0.0494 | 0.0450 | 0.0443 | |
Toyama | Fabricated metal products | Transport and postal activities | Iron and Steel | Pulp, paper and wood products | Professional and business services |
0.0773 | 0.0601 | 0.0597 | 0.0524 | 0.0476 | |
Japan | Professional and business services | Electronic parts | Production machinery | Electrical machinery | Non-Ferrous metals |
0.124 | 0.123 | 0.0987 | 0.0886 | 0.0714 |
Source: Fukui Prefecture [7]; Toyama Prefecture [8]; The Ministry of Internal Affairs and Communications of Japan [9].
Intermediate input and value added compose the domestic production of each sector as shown in Table 1, column. Final demand can generate not only domestic production but also value added because value added is a part of domestic production. Therefore, we can apply equation (17) above to final demand and value added in exactly the same manner. Seeing the inducement effect to value added amount by outflow and export, the first rank industry is "Electricity, Gas, and Heat supply" in Fukui, "Chemical products" in Toyama, and "Commerce" in Japan. Furthermore, "Chemical products" shows even bigger difference of value added between the two prefectures as shown in Table.6.
Table-6. Value added inducement effect by outflow and export (million yen)
1 | 2 | 3 | 4 | 5 | |
Fukui | Electricity, Gas, and Heat supply | Chemical products | Electronic parts | Commerce | Textile mill products |
244,108 | 116,412 | 108,520 | 107,880 | 89,905 | |
Toyama | Chemical products | Commerce | Production machinery | Professional and business services | Electronic parts |
329,346 | 237,131 | 177,217 | 104,935 | 102,600 | |
Japan | Commerce | Professional and business services | Transport and postal activities | Transportation equipment | Education and Scienteific research |
9,437,620 | 5,412,867 | 5,166,075 | 4,945,624 | 3,033,463 |
(continued)
6 | 7 | 8 | 9 | 10 | |
Fukui | Professional and business services | Transport and postal activities | Miscellaneous manufacturing | Electrical machinery | Rubber and plastics product |
73,938 | 53,691 | 48,200 | 46,238 | 42,919 | |
Toyama | Fabricated metal products | Transport and postal activities | Non-Ferrous metals | Electricity, Gas, and Heat supply | Education and Scienteific research |
101,837 | 97,402 | 93,216 | 86,766 | 80,761 | |
Japan | Iron and Steel | Production machinery | Electronic parts | Chemical products | Electrical machinery |
2,933,415 | 2,846,876 | 2,460,180 | 2,239,688 | 1,908,771 |
Source: Fukui Prefecture [7]; Toyama Prefecture [8]; The Ministry of Internal Affairs and Communications of Japan [9]
The inducement effect to employment for an industry can be calculated as follows:
= (the number of employees in each industry / each industry’s domestic production) × production inducement for each industry.
= labor input coefficient in each industry × production inducement for each industry
The rate of the number of employees in each industry divided by each industry’s domestic production is called "labor input coefficient". When labor input coefficient matrix is L,
Here, L` is the inducement effect to employment. That is to say, this indicates the inducement effect to a sectors’ employment by each final demand.
When seeing the inducement effect to employment by outflow and export, "Commerce" has the first position in all three areas, Fukui, Toyama, and Japan. Moreover, "Agriculture, forestry and fisheries" is ranked at the second in Fukui and Toyama. Moreover, the eighth rank is "Pulp, paper and wood products" in Fukui and "Chemical products" industry in Toyama. The industries’ values of Fukui are generally smaller than those of Toyama. In particular, "Commerce" industry of Toyama even outnumbers that of Fukui and "Fabricated metal products" industry, too. However, "Textile mill products" industry’s value of Fukui is much bigger than that of Toyama.
Table-7. Employment inducement effect by outflow and export (person)
1 | 2 | 3 | 4 | 5 | |
Fukui | Commerce | Agriculture, forestry and fisheries | Textile mill products | Professional and business services | Miscellaneous manufacturing |
22,613 | 21,828 | 20,017 | 12,253 | 10,866 | |
Toyama | Commerce | Agriculture, forestry and fisheries | Fabricated metal products | Professional and business services | Transport and postal activities |
46,352 | 32,152 | 22,753 | 19,312 | 18,306 | |
Japan | Commerce | Professional and business services | Transport and postal activities | Transportation equipment | Education and Scienteific research |
1,680,299 | 853,573 | 725,843 | 537,953 | 336,880 |
(continued)
6 | 7 | 8 | 9 | 10 | |
Fukui | Electronic parts | Transport and postal activities | Pulp, paper and wood products | Rubber and plastics product |
Fabricated metal products |
10,796 | 8,866 | 5,531 | 5,087 | 4,057 | |
Toyama | Personal services | Production machinery | Chemical products | Electronic parts | Rubber and plastics product |
12,246 | 12,129 | 11,844 | 11,411 | 11,034 | |
Japan | Production machinery | Fabricated metal products | Agriculture, forestry and fisheries | Construction | Information and communications |
323,229 | 163,313 | 138,807 | 126,390 | 112,470 |
Source: Fukui Prefecture [7]; Toyama Prefecture [8]; The Ministry of Internal Affairs and Communications of Japan [9].
This paper answers that the relationship between the two prefectures is about the same when seeing each industry’s index of power of dispersion and index of sensitivity of dispersion. However, the values of the index of power of dispersion show some different industries in higher ranked industries, which have bigger economic effect. Moreover, "Information and communications" industry is ranked at the seventh in Fukui and "Iron and Steel" industry has the eighth position in Toyama. On the other hand, the index of sensitivity of dispersion’s values indicate that the industries at higher rank have similarity though the rankings are somewhat different. Furthermore, "Finance and insurance" is ranked at the sixth in both Fukui and Toyama. "Real estate" industry has the seventh and the eighth position in Fukui and Toyama respectively. Seeing the production inducement effect of export and outflow to other prefectures, "Electricity, Gas, and Heat supply" is ranked as the first in Fukui prefecture. Toyama’s the first rank industry is "Chemical products". They are outstanding. Japan’s top five industries fairly differ from the industries of Fukui and Toyama. Additionally, when seeing the effect to employment, "Commerce" has the first position in three areas, Fukui, Toyama, and Japan. However, "Commerce" industry of Toyama even outnumbers that of Fukui and "Fabricated metal products" industry, too. On the other hand, "Textile mill products" industry’s value of Fukui is much bigger than that of Toyama. Fukui and Toyama are in the same area, we call Hokuriku. However, they don’t necessarily have the same industrial structure. Finally, I would like to thank my laboratory undergraduate students, who helped me with calculating tables.
Funding: This study received no specific financial support. |
Competing Interests: The author declares that there are no conflicts of interests regarding the publication of this paper. |
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