Evolution of the Size and Industrial Structure - 麻省理工学院人工智能研究专业

Evolution of the Size and Industrial Structure
of Cities in Japan between 1980 和 2010:
Constant Churning and Persistent Regularity
Tomoya Mori∗

This paper investigates the evolution of the Japanese economy between 1980
和 2010 with regard to the population and industrial structure of cities. 和
the rural-to-urban transformation settling by the 1970s, Japan experienced the
second stage of urbanization through the integration of nearby cities. This led,
一般, to a disproportionately high population growth rate of 24% for a set
of core cities during the review period. 同时, cities experienced
substantial changes to their industrial composition: 一般, 35% 的
manufacturing industries (at the 3-digit level) present in a city in 1980 有
left by 2010, 尽管 30% of manufacturing industries located in a city in 2010
had not been present in the same city in 1980. 值得注意的是, this substantial
relocation of populations and industries among cities took place while a simple
yet rigid relationship between the size and industrial composition of cities was
preserved, characterized by the roughly constant elasticity between the number
and average size of cities in which an industry was present. This paper discusses
the policy implications of this persistent regularity and the possible underlying
mechanisms.

关键词: agglomeration, central place theory, city systems, power laws,
transport costs
JEL codes: C33, R12

我. 介绍

The 30-year period between 1980 和 2010 studied in this paper coincides
with a period of major economic upheaval in Japan. Recovering from the economic
turmoil caused by two oil shocks and the end of the ﬁxed exchange rate system
in the 1970s, Japan experienced moderate growth triggered by major ﬁnancial

∗Tomoya Mori: 教授, Institute of Economic Research, Kyoto University; and Research Institute of Economy,
Trade and Industry. 电子邮件: mori@kier.kyoto-u.ac.jp. The research for this paper was conducted as part of the project,
An Empirical Framework for Studying Spatial Patterns and Causal Relationships of Economic Agglomeration,
undertaken at the Research Institute of Economy, Trade and Industry. It was partially supported by a Grant in
Aid for Research (Nos. 17H00987, 25285074, 26245037, and 15H03344) of the Japanese Ministry of Education,
Culture, Sports, Science and Technology. The road network data for Japan was obtained from the Center for Spatial
Information Science of the University of Tokyo. I would like to thank the participants at the Asian Development
Review Conference on Urban and Regional Development in Asia held in Seoul in July 2016, the managing editor,
and an anonymous referee for helpful comments and suggestions. The usual disclaimer applies.

Asian Development Review, 卷. 34, 不. 2, PP. 86–113

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Evolution of the Size and Industrial Structure of Cities in Japan 87

reform policies and public infrastructure investment during the ﬁrst half of the
1980s. This was followed by the forming of an asset price bubble, its bursting in
1991, and the long economic stagnation that has come to be known as “the lost 20
years.”

The rise and fall of individual cities, 然而, do not reﬂect these alternating
developments at the national level.1 Rather, their relative locational advantages, 作为
determined by the expanded highway and high-speed railway networks established
during the growth period of the 1970s and 1980s, appear to have a long-lasting
impact on the fate of individual cities and regions. As will be shown in section
二, 多于 30% of the variation in population growth among individual cities
之间 1980 和 2010 is related to transport development. While the development
of the national transport network enhanced the accessibility of all locations in
日本, those cities that were associated with major transport hubs, intersections, 和
terminals gained even more, which in turn attracted industries and migrants to these
城市, resulting in their disproportionate growth. These select cities experienced
an average population growth rate of 24% during the period by swallowing
surrounding cities. Their growth was accompanied by a decrease in the number
of Japanese cities during the review period from 309 到 221.

Cities do not result solely from population agglomerations, but are usually
associated with industrial agglomerations. As will be discussed in section IV.B,
it is natural to characterize the industrial structure of a city in terms of the
absolute, rather than the relative, presence of each industry; 那是, in terms of
the agglomerations rather than specialization. In this study, the signiﬁcant presence
of each of the 110 manufacturing industries (3-digit level) of the Japanese Standard
Industrial Classiﬁcation is identiﬁed by using the agglomeration-detection approach
developed by Mori and Smith (2014), so that the industrial composition of a city can
be deﬁned by the set of industries whose agglomerations overlap with this city.2 In
这个上下文, a larger city naturally houses a larger number of industries. 然而,
the list of industries present in a city appears to change drastically over the 30-year
review period even if the number of industries changes little. 更具体地说,
the cities included in our data experienced substantial churning in their industrial
作品: among the cities that remained throughout the 30-year period, 一个
平均数 35% of the 3-digit manufacturing industries present in a city in 1980
had left by 2010, while an average of 30% of the industries present in a city in 2010
had not been located in the same city in 1980.3 Even among rapidly growing cities,

1The deﬁnition of cities is provided in section II.
2As industrial classiﬁcations vary from year to year, only the set of industries that appear throughout the

review period are included to make comparisons between different years meaningful.

3Our interest here is the range of industries in a given city. 因此, it is natural to look at the presence
of industries. 或者, Duranton (2007) proposes a measure of industrial churning based on employment
distribution across industries. 然后, the evaluated “churning level” reﬂects the variation of labor intensity and
production scales across industries. 例如, the disappearance of labor-intensive industries will be more
pronounced than that of capital-intensive ones. 还, while a large number of employees for a given ﬁrm usually

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88 Asian Development Review

industrial diversity did not simply expand during the review period, but rather a
sizable portion of the industrial composition of each city was replaced.

Despite the substantial relocations of both populations and industries among
城市, the size distribution and the relative industrial composition of cities remained
remarkably similar over the period studied. As for the former, the upper tail of the
city-size distribution exhibits the persistence of the power law coefﬁcient. As for
后者, the hierarchy principle held to a large extent; 那是, the set of industries
present in a smaller city is the subset of that in a larger city. 更具体地说, 它
is possible to identify, 一般, 大致 70% of the industrial composition of
a given city based on this principle despite the frequent churning of the industrial
composition of cities. When taken together, these two regularities imply a persistent
log-linear relationship between the number and average size of cities in which
a given industry is present, which is designated as the number–average size rule
(森, Nishikimi, 和史密斯 2008; Mori and Smith 2011).

Economic policies at the city and regional levels are often targeted at
population growth and promotion of industries. 然而, in the presence of
persistent regularities between size and the industrial structure of cities, 这样的
policies may have little inﬂuence. This is because the relative size of a city is largely
dictated by the persistent power law, and the relative position of a city in the city-size
分配, 反过来, dictates the industrial composition of the city via the hierarchy
原则.

The rest of the paper proceeds as follows. Section II describes the evolution
of the sizes and locations of cities in Japan between 1980 和 2010, 和
demonstrates how the nationwide development of a high-speed transport network
in the 1970s and 1980s had a substantial impact on the growth patterns of cities.
Section III lays out the evidence for the churning of the industrial composition
of cities with a focus on manufacturing industries. Section IV shows evidence
of the persistent regularities in city-size distribution and the relationship between
the size and industrial composition of cities. Section V discusses the implications
of this study for theoretical modeling and regional economic policies. Section VI
concludes the paper.

二. Growth and Decline of Cities

The spatial structure of the economy in a given country can perhaps
most precisely be described in terms of the city system. Cities here refer
to metropolitan areas that are combinations of working and residential places
than municipalities as delineated by
connected by commuting ties,

相当

implies a larger output value for that ﬁrm within a given industry, this is not often true when ﬁrms in different
industries are compared. 因此, his measure is somewhat misleading as a measure of industry churning. To gauge
the range of industries in a city, this paper adopts the count of industries that have a statistically signiﬁcant presence
(agglomeration) in a city.

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Evolution of the Size and Industrial Structure of Cities in Japan 89

数字 1. Population Growth Rates of Cities, 1980–2010

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来源: Author’s calculations based on University of Tokyo, Center for Spatial Information Science. Urban
Employment Area. http://www.csis.u-tokyo.ac.jp/UEA/index_e.htm

jurisdictional boundaries. Metropolitan areas are usually identiﬁed as a bundle of
municipalities for which population and commuting data are available. In this study,
we adopt the deﬁnition of an Urban Employment Area as proposed by Kanemoto
and Tokuoka (2001), which is the most popular deﬁnition of a metropolitan area
in Japan.4 Hereafter, we will use cities and metropolitan areas interchangeably. 为了
simplicity of analysis, this study covers only the cities on islands that are connected
to either Honshu (Japan’s main island) or Hokkaido by road. 因此, isolated small
islands are omitted.5 Cities are deﬁned as endogenous and their boundaries vary
over time in response to changes in commuting patterns. 因此, not only can the
boundaries of existing cities expand or contract, but new cities may also form as old
cities disappear.

经过 1980, the rural-to-urban transformation in Japan had almost reached
completion and the country’s inhabited lands were saturated with cities that
占 87% of the total population. There has been not much change in
the urbanization rate since then. 尽管如此, cities exhibited substantial volatility
in population between 1980 和 2010 as indicated by the distribution of population
growth rates for this period in Figure 1. 的 309 cities that existed in 1980,
114 were either absorbed into other cities or simply disappeared during the review
时期, 尽管 26 new cities were formed, 离开 221 cities in 2010. The cities that

4The set of Urban Employment Areas used in the present study is available online at University of Tokyo,
Center for Spatial Information Science. Urban Employment Area: http://www.csis.u-tokyo.ac.jp/UEA/index_e.htm

5The omitted population is less than 1% of the total population.

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90 Asian Development Review

数字 2. Development of High-Speed Railway Networks

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来源: For municipal boundaries, Takashi Kirimura. Municipality Map Maker. http://www.tkirimura.com/mmm/;
for high-speed railways networks, National Land Numerical Information Service of Japan. http://nlftp.mlit.go.jp/ksj
-e/index.html

were present in both 1980 和 2010 experienced, 一般, population growth of
24% during the review period (with a standard deviation of 47%).

As mentioned above, the 1970s and 1980s saw the extensive development of
highways and high-speed railway networks throughout Japan. 数字 2 depicts the
development of the high-speed railway network, with the cells in the background
representing cities in 2010. The development began in the section linking Tokyo and
Osaka in 1964 (the red segment in the ﬁgure), which was triggered by the Tokyo
Olympics in the same year. The network ﬁrst expanded westward to Fukuoka in
1975, and then eastward to Morioka, and northward to Niigata in 1982. The rest
of the extensions came mostly after 2000. 因此, the network structure in the 1980s
seemed to have the strongest inﬂuence on the growth of cities in the 1990s and
2000s.

The development of highway networks followed that of high-speed railways
in the 1970s and 1980s as shown in Figure 3. From the 1990s, the network expanded
to cover the more rural parts of the country.

The development of these transport networks through the 1980s seemed to
play a key role in the drastic rise and fall of cities. 数字 4 plots the growth rates
of individual cities that existed in both 1980 和 2010. The horizontal line indicates

Evolution of the Size and Industrial Structure of Cities in Japan 91

数字 3. Development of Highway Networks

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来源: National Land Numerical Information Service of Japan. http://nlftp.mlit.go.jp/ksj-e/index.html

数字 4. Distribution of Population Growth Rates of Individual Cities, 1980–2010

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来源: Author’s calculations based on University of Tokyo, Center for Spatial Information Science. Urban
Employment Area. http://www.csis.u-tokyo.ac.jp/UEA/index_e.htm

92 Asian Development Review

这 9% growth rate of the national population over this period. The larger cities
labeled in bold, italic, and normal fonts are located at the site of major high-speed
rail stations, highways, and 24-hour airports, 分别.

For all types of transport networks, Tokyo emerges as a major terminal. 到
travel from the west of Tokyo to either the east or north of Tokyo by high-speed
railway, passengers must change trains in Tokyo, which contributes to the locational
advantage of the city. 如图 3, highways expand radially from
东京, indicating that transport network developments in Japan are highly biased
to improve accessibility to and from Tokyo.

There are other obvious examples of high growth rates at the major terminals
and intersections of the networks. Shikoku island, one of Japan’s four major islands,
was connected to the main island of Honshu for the ﬁrst time in 1988 via Okayama.
因此, Okayama became a gateway for the Shikoku region, which had the effect
of doubling the population of the Okayama metropolitan area from 750,188 到
1,532,146 之间 1980 和 2010.6 A similar advantage boosted the population
size of Sumoto (as indicated in Figure 3). Kitagami has grown as a key intersection
of the highway and high-speed railway networks. Fukuoka has been a terminal
of the high-speed railway since 1975, and together with its 24-hour international
airport, has emerged as a gateway to Kyushu island (as indicated in Figure 2).7
Utsunomiya and Takasaki–Maebashi are located at the origin of the eastward and
northward high-speed railway lines from Tokyo, 分别. Toyama, located on
the northern coast of Shikoku, experienced substantial population growth from
504,353 到 1,093,247 之间 1980 和 2010 (as indicated in Figure 4). 这
can be explained by the completion of a highway route linking Tokyo and Osaka
via Toyama in 1990. The locations of major airports have also boosted the city’s
人口. 尤其, the airport at Chitose boosted the population of nearby
Sapporo.

While the expansion of transport networks improves the accessibility of
all cities along the network, the effects are not uniform. 通常, locations near
major hubs tend to lose relative locational advantage to the hubs, and hence lose
population and industries. This phenomenon is often called the “straw effect” (看,
例如, Behrens et al. 2009), meaning that the growth potential of a location
is overwhelmed by the nearby location with a better advantage.8 Typical examples
of declining cities owing to straw effects are Kure and Kitakyushu located along the
high-speed railway line leading to Fukuoka (数字 2). Both were major industrial
城市, with the latter being the eighth largest city in Japan in 1980. 然而, 他们的

6The deﬁnition of a city used by Kanemoto and Tokuoka (2001) is sensitive to the redeﬁnition of municipal
边界. The disproportionate growth of Takasaki–Maebashi and Okayama shown in Figure 4 may be partly
overstated due to this redeﬁnition.

7在 2004, the high-speed railway was extended beyond Fukuoka. 然而, passengers must still change trains

at Fukuoka. 因此, the terminal advantage of Fukuoka continued after 2004.

8See Faber (2014) for a systematic evidence of the straw effects of the highway development in the People’s

Republic of China.

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Evolution of the Size and Industrial Structure of Cities in Japan 93

transport accessibility declined substantially compared with Fukuoka at the west
end of the network. The port city of Kamaishi also lost its locational advantage as
it was not located on either the highway or the high-speed railway network.

The discussion above on the impacts of transport development on city size
can be conﬁrmed by regressing the (log of) a city’s population growth rate between
1980 和 2010 on a range of dummy variables, each of which represents the
presence of a transport network node and the growth rate of the number of local
railway lines connected to the city:

(西德:2)lnPOPc = α +

(西德:2)

β m
t

δm
C,t

+ C (西德:2)AIRc + ηAIR(24 小时)C + ξ (西德:2)lnRAILc

米(西德:4)中号

t(西德:4)是
+ ζ lnPOPc,1980 + εc

(1)

(西德:2)lnPOPc on the left-hand side represents the log of the population growth rate
of city c (之间 1980 和 2010), 其中 M (西德:3) {a high-speed railway station, A
high-speed railway terminal, a location along the highway, and a node of Shikoku
link} represents the set of transport advantages and Y (西德:3) {1970, 1980, 1990, 2000}
= 1 if city c is at the node of type m
represents the set of time points, so that δm
C,t
which is active in year t, and zero otherwise. (西德:2)AIR(24小时)C [(西德:2)AIRc] equals 1 如果
there is an airport that is [不是] in 24-hour operation within 50 kilometers (km)
from city c in 2010 但不在 1980, and zero otherwise.9 (西德:2)lnRAILc is the log of the
growth rate of the number of local railway lines that have stations in the city; 和
lnPOPc,1980 is the log of the population size of city c in 1980. 最后, εc is an error
学期.

桌子 1 summarizes the result of the regression using an ordinary least
squares (OLS) estimation. Cities at terminal locations of the high-speed railway in
2000 (Fukuoka and Tokyo) and at the gateway to Shikoku island in 1990 (Okayama)
experienced particularly high growth. Although less spectacular, expansion of the
high-speed railway network into the eastern and northern regions of Honshu in the
1980s contributed to the growth of cities in these areas, which is reﬂected in the
signiﬁcant coefﬁcient of the 1990 dummy for high-speed railways. The effects of
new transport links do not necessarily show up immediately after their completion.
The signiﬁcant terminal effects at Fukuoka and Tokyo in 2000 may reﬂect the
fact that the network was so extensive by 2000 given the nationwide expansion of
high-speed railways in the 1980s and 1990s.

An interesting contrast between the impact of the high-speed railway network
and that of the highway network is that while a highway connection leads to
signiﬁcant population growth in a city at every point in time, this is not the case
for high-speed railways. Unlike highways, which are less closely associated with

9Since most cities have only one nearby airport and most airports had already been constructed by 1980, 这

variable captures whether there was a newly built airport near city c between 1980 和 2010.

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94 Asian Development Review

桌子 1. Population Growth of Cities and Changes in Transport Network Structure

Dependent variable: Population growth rate between 1980 和 2010

Exp. Variables Year

Exp. Variables

年

Coeff.

High-speed
railway

High-speed
railway
terminal

Highway

Coeff.
1970 −0.145
0.007
1980
0.339***
1990
2000
0.249
1970 −0.371
1980 −0.590
1990 −0.292
2000
1970
1980
1990
2000

1.265***
0.350**
0.272***
0.155*
0.235**

Shikoku link

0.213
0.151
0.128
0.249 (西德:2)AIR
0.438 (西德:2)AIR (24小时)
0.399 (西德:2)ln # (local rail links)
0.416
0.436
0.136
0.088
0.090
0.114

ln Pop. size in 1980

观察结果
Adj. R2

195
0.290

SE = standard error.
Notes: *** = p < 0.01, ** = p < 0.05, * = p < 0.10. Source: Author’s calculations. 0.032 1.681*** 1980 1990 2000 −0.012 0.047 0.131 −0.182 −0.078** 0.401 0.406 0.429 0.094 0.080 0.128 0.038 l D o w n o a d e d f r o m h t t p : / / d i r e c t . m i t . / e d u a d e v / a r t i c e - p d l f / mass transportation, in the case of a high-speed railway network, the frequency and connectivity of transport services can differ greatly between major intersections and terminals and local stations, and hence the realized gains in transport accessibility can differ accordingly. The differential improvement in accessibility along the high-speed railway network resulted in nonuniform population growth rates across different cities. An example is the comparison between closely located Fukuoka and Kitakyushu (refer to Figure 2). Kitakyushu is an older industrial city that ﬂourished during the high-growth period of the 1960s. However, when the high-speed railway line terminated at Fukuoka rather than at Kitakyushu, it appeared to have a permanent impact on the growth paths of these two cities whose population sizes were comparable in 1980. Fukuoka was already the sixth largest city in Japan in 1980 with a population of 1,773,129. Its population expanded by 41% over the next 3 decades to 2,495,552, making it Japan’s ﬁfth largest city in 2010. Meanwhile, Kitakyushu’s population fell from 1,524,747 to 1,370,169. These nonuniform impacts are partly responsible for the insigniﬁcant coefﬁcients of high-speed railway dummies. Furthermore, Tokyo is a unique terminal connecting high-speed railway lines in virtually all directions, which should partly explain the disproportionately large population of Tokyo today. The estimated coefﬁcient of the lagged population size in equation (1) is negative and signiﬁcant (−0.078), meaning that it is more difﬁcult for a larger city to attain the same growth rate under a given transport development. In fact, transport developments account for more than 30% of the variation in the growth / / / / 3 4 2 8 6 1 6 4 4 3 8 1 a d e v _ a _ 0 0 0 9 6 p d . f b y g u e s t t o n 0 7 S e p e m b e r 2 0 2 3 Evolution of the Size and Industrial Structure of Cities in Japan 95 rates of cities after removing the effect of initial population. Regressing (cid:2)lnPOPc + 0.078 lnPOPc,1980 on the rest of the variables yields R2 = 0.40 (adj. R2 = 0.34). Of course, the quantiﬁcation of the underlying causal effects should involve appropriate instruments for transport developments as in Faber (2014), which is beyond the scope of the present paper.10 III. Churning of Industrial Composition of Cities It was not only populations but also industries that were substantially shufﬂed during the review period. To show this, we adopt the cluster-detection method developed by Mori and Smith (2014) to identify the set of industries that have agglomerations in each city. This method, based on a simple probabilistic model of establishment location behavior, identiﬁes the set of agglomerations—the signiﬁcant spatial clusters of establishments—for each industry in terms of the partition of the set of basic regions. Each basic region is a 10 km × 10 km cell and the entire set of the basic regions consists of 3,735 cells covering the locations in Japan included in this study.11 The key features of this approach include (i) ﬁltering out insigniﬁcant clusterings of establishments, (ii) determining the spatial extent of each individual agglomeration, and (iii) jointly identifying the set of all agglomerations of a given industry in a statistically consistent manner.12 To highlight the churning phenomenon, we restrict the set of industries to those that appear throughout the period being studied. Those industrial categories that do not appear in all years are excluded from the analysis. For instance, the 2-digit category of “electronic parts, devices, and electronic circuits” was introduced in 2006 and therefore the industries in this category, by deﬁnition, did not exist in earlier years. However, even if these “new” industries are excluded, and similarly if the “old” industries that are only present in earlier years are excluded, the churning of industries happening across cities is remarkable. This leaves us with a set of 110 3-digit manufacturing industries between 1980 and 2010.13 and that of identiﬁed agglomerations for two sample industries, livestock products and leather gloves and mittens, in 2010 are shown in Figures 5 and 6, respectively. The former is a relatively more ubiquitous industry and the latter is a relatively more concentrated spatial distribution of establishments The 10While there are several recent attempts of measuring the impacts of transport development on regional growth (see, for example, Duranton and Turner 2012 and Baum-Snow et al. 2017, 2016), few of them are successful in incorporating the nonuniform effects of transport development such as straw effects. Faber (2014) is a remarkable exception. Thus, there are more issues than endogeneity, and this literature is still subject to further reﬁnements. 11The basic regions in 1980 comprise 3,363 municipalities by 2001, rather than 10 km-by-10 km cells, due to data availability. 12Except for the regional divisions adopted, the rest of the setup for agglomeration detection follows that in Mori and Smith (2014). 13Industry categories containing miscellaneous 3-digit industries for which no speciﬁc 3-digit categories could be assigned are also excluded. l D o w n o a d e d f r o m h t t p : / / d i r e c t . m i t . / e d u a d e v / a r t i c e - p d l f / / / / / 3 4 2 8 6 1 6 4 4 3 8 1 a d e v _ a _ 0 0 0 9 6 p d . f b y g u e s t t o n 0 7 S e p e m b e r 2 0 2 3 96 Asian Development Review Figure 5. Spatial Distributions of Establishments and Agglomerations of Livestock Products Manufacturing in 2010 Source: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 2009. “Economic Census for Business Frame.” Figure 6. Spatial Distributions of Establishments and Agglomerations of Leather Gloves and Mittens Manufacturing in 2010 l D o w n o a d e d f r o m h t t p : / / d i r e c t . m i t . / e d u a d e v / a r t i c e - p d l f / / / / / 3 4 2 8 6 1 6 4 4 3 8 1 a d e v _ a _ 0 0 0 9 6 p d . f b y g u e s t t o n 0 7 S e p e m b e r 2 0 2 3 Source: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 2009. “Economic Census for Business Frame.” one.14 In the former [latter], 60 [14] agglomerations are identiﬁed from 3,514 [139] establishments. A given industry i is present in city c if an agglomeration of industry i and city c have a strictly positive area of spatial intersection. These cities are designated as the choice cities of industry i. The choice cities for livestock products manufacturing are indicated by the 134 red patches in diagram (a) in Figure 7, while the choice cities of leather gloves and mittens manufacturing are indicated by the 15 red patches in diagram (b). To make comparisons of the industrial composition of a 14In diagram (a) of Figures 5 and 6, darker cells have a higher density of the corresponding industry. In diagram (b) of Figures 5 and 6, each colored patch represents a single agglomeration of the corresponding industry. Evolution of the Size and Industrial Structure of Cities in Japan 97 Figure 7. Cities in which Livestock Products and Leather Gloves and Mittens Manufacturing Industries are Present in 2010 Source: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 2009. “Economic Census for Business Frame.” Figure 8. Industrial Diversity of Cities l D o w n o a d e d f r o m h t t p : / / d i r e c t . m i t . / e d u a d e v / a r t i c e - p d l f / / / / / 3 4 2 8 6 1 6 4 4 3 8 1 a d e v _ a _ 0 0 0 9 6 p d . Sources: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 2009. “Economic Census for Business Frame”; Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 1981. “Establishment Census.” city across different points in time, we ﬁx the city boundaries in 2010. The analysis in this section includes only the set of 205 cities (out of 221) that have a strictly positive number of industries exhibiting signiﬁcant agglomeration in all years. In this context, the industrial composition of city c can be represented by the set of industries present in the city, designated by Ic, and the industrial diversity of city c can be represented by the number of industries present in the city, |Ic|. The industrial diversity varies signiﬁcantly across cities as depicted in Figure 8. While the mean diversity is 45.51 (46.68), the range is almost full; that is, from 0 to 110 (0 to 106) with a standard deviation of 27.27 (27.1) in 2010 (1980). Not surprisingly, the industrial diversity of each city is highly persistent: the correlation between industrial diversity in any two different points in time is greater than 0.9; in particular, the correlation between industrial diversity in 1980 and 2010 f b y g u e s t t o n 0 7 S e p e m b e r 2 0 2 3 98 Asian Development Review Figure 9. Comparison of Industrial Diversity between 1980 and 2010 Sources: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 2009. “Economic Census for Business Frame”; Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 1981. “Establishment Census.” Figure 10. Entries and Exits of Industries for Individual Cities l D o w n o a d e d f r o m h t t p : / / d i r e c t . m i t . / e d u a d e v / a r t i c e - p d l f / / / / / 3 4 2 8 6 1 6 4 4 3 8 1 a d e v _ a _ 0 0 0 9 6 p d . f b y g u e s t t o n 0 7 S e p e m b e r 2 0 2 3 Sources: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 2009. “Economic Census for Business Frame”; Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 1981. “Establishment Census.” is 0.94 (Figure 9). However, this does not mean that the industrial composition of each individual city is also persistent. Diagram (a) [(b)] in Figure 10 shows the distribution of the entry share [exit share]—the share of industries in a given city that is present in 2010 [1980] but not in 1980 [2010]—in the industrial composition of a city in 2010 [1980]. The average entry [exit] share is 0.33 [0.36] with a standard deviation of 0.19 [0.19]. Thus, behind the persistent industrial diversity of individual cities, there is substantial churning of the industrial composition of these cities. Evolution of the Size and Industrial Structure of Cities in Japan 99 Figure 11. Jaccar Index Values for Industrial Compositions of Cities between 1980 and 2010 Sources: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 2009. “Economic Census for Business Frame”; Statistics Bureau, Ministry of Internal Affairs and Communications of Japan. 1981. “Establishment Census.” Alternatively, the churning of industries across cities can be quantiﬁed in terms of the Jaccar index, Jc(s, t), for city c between years s and t, computed as the ratio of the size of intersection to the size of union of the sets of industries for city c in years s and t. Figure 11 shows the distribution of Jc(1980, 2010) where the average of the index value is 0.5 with a standard deviation of 0.19. As is consistent with the entry and exit shares above, if a city has the same industrial diversity in 1980 and in 2010, then an average of one-third of the industrial composition has been replaced during the review period. It is worth noting that the churning is substantial even for shorter time periods. That is, average values of Jc(1980, 2000) and Jc(2000, 2010) are 0.53 and 0.6, respectively.15 IV. Persistent Regularity in Size and Relative Industrial Composition of Cities Despite the substantial churning of populations and industries across cities during the review period, there are persistent structural regularities related to the population distribution and relative industrial composition of cities. Below, each of these regularities is discussed in detail. 15Since the largest cities such as Tokyo include almost the entire set of industries, their industrial compositions do not change much between 1980 and 2010. Hence, their Jaccar indexes are close to 1. On the other hand, the smallest cities typically have only ubiquitous industries. Since ubiquitous industries are similar over time, their Jaccar indexes are also close to 1. Consequently, most of the industry churning that can be quantiﬁed reﬂects activity in intermediate-sized cities. l D o w n o a d e d f r o m h t t p : / / d i r e c t . m i t . / e d u a d e v / a r t i c e - p d l f / / / / / 3 4 2 8 6 1 6 4 4 3 8 1 a d e v _ a _ 0 0 0 9 6 p d . f b y g u e s t t o n 0 7 S e p e m b e r 2 0 2 3 100 Asian Development Review A. Power Law for City-Size Distribution City-size distributions are known to be well approximated by power laws across a wide range of countries (see, for example, Gabaix and Ioannides 2004). If each city size, s, is treated as a realization of a random variable S with distribution P, then S is said to satisfy an (asymptotic) power law with exponent κ, if and only if for some positive constant a: sκ P(S > s) = a,

lim
s→∞

which can alternatively be expressed as
磷(S > s) ≈ as−κ ,

s → ∞

(2)

(3)

In this study, this relationship is referred to as a power law. If a given set of n cities
is postulated to satisfy such a power law, their sizes are distributed as shown in
方程 (3), and if these city sizes are ranked as s1 (西德:4) s2 (西德:4) ··· (西德:4) sn, 这样
the rank rc of city c is given by rc = c, then it follows that a natural estimate of
磷(S > sc) is given by the ratio c/n (西德:3) rc/n.

(西德:3)
rc
n

因此, using equation (3), we obtain the following approximation:

≈ P (S > si) ≈ as−κ ⇒ ln (rc) ≈ ln (一个) − κ ln (sc)
(西德:5)
ln(rc),

⇒ ln (sc) ≈ b −

(西德:3)
1
κ

(西德:4)

(4)

(5)

where b (西德:3) ln(一个)/κ. This explains the standard log regression method for estimating
κ in terms of the rank-size data, [ln(rc), ln(sc)] for c = 1, ……, n.

数字 12 plots ln sc versus ln rc for all cities, C, in the years 1980, 1990, 2000,
和 2010. As discussed in section II, cities with a relative locational advantage
have grown by absorbing surrounding cities. The number of cities fell from 309 在
1980 到 283, 261, 和 221 在 1990, 2000, 和 2010, 分别, while the average
population size of cities increased from 330,075 在 1980 到 391,038, 443,237, 和
545,745. 然而, the approximate log-linearity of this rank-size data in each year
shows that Japanese cities appear to exhibit a power law with exponent κ, 给定
roughly the reciprocal of the slope of each curve.

然而, it is also clear that if one estimates this slope with OLS, 这
downward bend in this curve for small cities will tend to produce a slope estimate
that is too steep, implying that the estimate ˆκ of the exponent κ will be too small.
One of the simplest methods for correcting this bias, as proposed by Gabaix and
Ibragimov (2011), is to reduce the rank scale by 0.5, which yields the following
modiﬁed regression:
ln sc = α − θln(rc − 0.5) + εc,

(6)

with θ = 1/κ.

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Evolution of the Size and Industrial Structure of Cities in Japan 101

数字 12. City-Size Distributions

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The estimated power law coefﬁcients ˆθ are 1.07, 1.08, 1.09, 和 1.13, 在
这些年 1980, 1990, 2000, 和 2010, 分别. Compared with the sizes of
individual cities, these values are far less volatile. The modest increase in the power
coefﬁcient is consistent with the growth of large cities through the absorption of
small ones.

乙.

Hierarchy Principle and the Number-Average Size Rule

There is a strong relationship between the size and industrial composition of
城市. Following Mori, Nishikimi, 和史密斯 (2008) and Mori and Smith (2011), 如果
the cities in which industry i is present are designated as choice cities of industry i,
then the number of choice cities of industry i, ni, and the average population size, ¯si,
of these cities have a log-linear relationship, which is known as the number-average
尺寸 (NAS) 规则, as indicated by the “+” plots in Figure 13 对全部 110 3-digit
manufacturing industries in 2010.

The ﬁgure shows the NAS plot as well as two curves: the upper-average and
lower-average curves. The former is the average population size of the largest cities
and the latter is that of the smallest cities for the number of cities given by each point
on the horizontal axis. 因此, these curves deﬁne the upper and lower bounds for the
NAS plots. The NAS plots almost hit their upper bound, meaning that the choice
cities for each industry roughly consist of the largest cities. 这, 反过来, implies
that the industrial composition of cities exhibits a strong hierarchical relationship
such that the set of industries present in a smaller city is roughly the subset of that in

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102 Asian Development Review

数字 13. Number-Average Size Rule, Hierarchy Principle, and the Power Law for a
City-Size Distribution

来源: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan.
2009. “Economic Census for Business Frame.”

a larger city. When this hierarchical relationship holds, the industrial compositions
of cities are said to satisfy the hierarchy principle (Christaller 1933).

此外,

the approximate log-linearity of the upper-average curve

reﬂects the asymptotic power law for city-size distribution.16

The log-linear slope is ﬁtted to the NAS plots for each year depicted in Figure

14 using an OLS estimation as follows:

1980: ln sι = 16.93 - 0.74 ln ni, R2 = 0.99
(0.033) (0.007)

2000: ln sι = 17.02 - 0.72 ln ni, R2 = 0.97
(0.051) (0.011)

2010: ln sι = 17.11 - 0.72 ln ni, R2 = 0.99
(0.030) (0.007)

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(7)

(8)

(9)

Equations (7), (8), 和 (9) exhibit approximate common power law reﬂecting the
persistent power-law coefﬁcients for city-size distribution, where the numbers in
the parentheses are the standard errors. Speciﬁcally, the elasticity of the average
size of choice cities with respect to the number of choice cities is around 0.72–0.74.

16For more details, see the discussion on Theorem 2 in Mori, Nishikimi, 和史密斯 (2008).

Evolution of the Size and Industrial Structure of Cities in Japan 103

数字 14. Number-Average Size Rule

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of Japan. 2009. “Economic Census for Business Frame”; Statistics Bureau, Ministry of Internal Affairs and
Communications of Japan. 2001. “Establishment and Enterprise Census”; Statistics Bureau, Ministry of Internal
Affairs and Communications of Japan. 1981. “Establishment Census.”

数字 15. Spatial Coordination between Industries and Population

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As stated above, 一般, one-third of the industrial composition of a city was
replaced between 1980 和 2010. It is remarkable that this churning of industries
took place while maintaining a common power law.

In the context of central place theory, the agglomeration of population and
that of industries reinforce each other. 数字 15(A) shows evidence supporting this
implication by plotting the log of the population growth rate versus the increase in
the industrial diversity of each city i, (西德:2)|Ii|, for cities that experienced increases in

104 Asian Development Review

industrial diversity. The correlation is 0.32 and is signiﬁcant. 因此, an increase in
the number of industries coagglomerating in a city accompanies an increase in the
city’s population.

数字 15(乙) shows the similar plots for cities that experienced decreases
in industrial diversity. The correlation between the change in population size and
that in industrial diversity for these cities is insigniﬁcant. This may be owing to the
inertia of population agglomeration, such that shrinking industrial diversity does not
immediately translate into reduced population agglomeration. The extra workers are
likely to be absorbed in the nonmanufacturing sectors. The period studied coincides
with the period of deindustrialization. The share of manufacturing in the total
establishment counts decreased by 33% 从 13.5%; while wholesale, retail, 和
services increased by 22% 从 49.4%; ﬁnancial services increased by 20% 从
1.3%; and transport and information increased by 55% 从 2.5%. A similar trend
can be observed in employment.

最后, we look at quantifying the hold of the hierarchy principle. 这
more complete the hierarchy principle is the fewer are the degrees of freedom for
inﬂuencing the industrial composition of a given city by independent place-based
policies since the industrial composition of this city is more closely linked to the
rest of the cities.

Let Ic be the set of industries present in city c and the hierarchy share between

cities c and d be deﬁned by

H(C,d ) = |Ic ∩ Id |/| Ic|

(10)

然后, the hierarchy principle implies that H(C,d) = 1 for cities c and d, 这样
sc (西德:5) sd. If the set of hierarchy pairs of cities in the set C of all cities is deﬁned as
H (西德:3) {(C, d): C, dε C, sc (西德:5) sd}, then the degree to which the hierarchy principle
holds can be quantiﬁed by
(西德:2)
H = 1
|H|

H(C,d )

(11)

(C,d )(西德:4)H

The value of H is, 一般, 0.7 (0.24), 0.73 (0.2), 和 0.67 (0.24) 在 1980, 2000,
和 2010, 分别, where the numbers in parentheses are standard deviations.
因此, it can be said that roughly 70% of the realized industrial location patterns are
consistent with the hierarchy principle.

To test the signiﬁcance of these values of H, we construct the counterfactual
industrial composition of each city as follows. 第一的, the industrial diversity of each
city c is ﬁxed at the actual value |Ic|. 然后, for each city c, 反事实的
industrial composition is chosen by selecting |Ic| industries without replacement
from the set of all industries, 我, with the choice probability of each industry i ϵ I
being ni/(西德:15)jϵI nj. By controlling for both the industrial diversity of cities as well

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Evolution of the Size and Industrial Structure of Cities in Japan 105

数字 16. Distribution of Average Hierarchy Shares under Counterfactual Agglomeration
Patterns in 2010

来源: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan.
2009. “Economic Census for Business Frame.”

as the locational diversity of industries, we generate 1,000 random counterfactual
location patterns of industries.

数字 16 depicts the distribution of average hierarchy shares under random
counterfactual location patterns of industries (the gray histogram) together with the
average hierarchy share under the actual location pattern of industries in 2010.
The p-value for the one-sided test under the null hypothesis—that the actual
location pattern of industries is an instance of the random counterfactual location
patterns—is virtually zero. 因此,
location patterns exhibit strong
the actual
consistency with the hierarchy principle. The same is true for all other years during
the review period.

V. Implications for Regional Economic Policies and Theoretical Modeling

The stringent spatial coordination of industries and population has been
observed at each point in time during the review period (1980, 1990, 2000, 和
2010), despite the substantial spatial churning of population and industries. 这
presence of these regularities has strong policy implications in that they act as
a constraint on policies aimed at giving an economic boost to an individual city
or industry. While there are no compelling theories to account for the observed
regularity formation at this point, it is necessary to discuss potential mechanisms
underlying these regularities to derive any policy relevance. The next section
reviews some relevant theoretical developments before discussing their policy
implications.

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106 Asian Development Review

Theoretical Foundation of the Persistent Regularities

There are two key regularities that are related: the power law for city-size
distribution and the hierarchy principle for the industrial composition of cities.
Under the perfect hierarchy principle, it is not simply that a larger city has more
industrial diversity than a smaller city, but also that larger cities have the entire
range of industries that are present in any smaller city. Since smaller cities are more
无处不在的 (under the power law), any industry found in a larger city but not in a
smaller city tends to be more localized (a smaller number of choice cities) than any
industry found also in the smaller city.

Among current theories, one approach to account for the hierarchy principle
is in terms of central place theory (Christaller 1933; Fujita, Krugman, and Mori
1999; Tabuchi and Thisse 2011; Hsu 2012; Akamatsu, 森, and Takayama 2017).
The central tenets of this theory assert that the heterogeneity of industries and the
积极的 (要求) externalities across industries, together with the spatial extent of
市场, give rise to the hierarchies of cities in terms of their industrial composition,
and thus to a diversity of city sizes. In the spatial competition model of Hsu (2012),
the difference among industries is only the scale economies in terms of the size
of ﬁxed costs. He shows that if the distribution of the size of ﬁxed costs can be
represented by a regularly varying function, then there is a locally stable equilibrium
in which the hierarchy principle holds, city-size distribution exhibits a power law,
and the NAS rule holds. Akamatsu, 森, and Takayama (2017) instead adopt a
multi-industry, multilocation extension of the new economic geography model of
Fujita, Krugman, and Mori (1999) and Pﬂüger (2004). In this model, each industry
produces a continuum of differentiated consumption goods (Dixit and Stiglitz
1977), subject to a given substitution elasticity of goods, while there are a large
number of such industries that differ in the elasticity of substitution. To determine
the distribution of substitution elasticities across industries, Akamatsu, 森, 和
Takayama (2017) took a sample from the estimated substitution elasticities of more
比 13,000 imported products in the United States by Broda and Weinstein (2006).
They generated a large number of bootstrapped samples of stable equilibria of the
model economy and showed that the hierarchy principle, the power law for city-size
分配, and the NAS rule are generic properties of stable equilibria.

As for the power laws for city-size distribution, the most popular theoretical
derivation postulates that growth rates of individual cities are independently and
identically distributed random variables (Gibrat 1931).17 然而, these models
do not simultaneously account for the hierarchy principle, or at least it is not
explicitly obtained. The key difference between these random growth models and
the central place models presented above is the absence and presence of space. 这

17For more discussion on Gibrat’s law, see Gabaix 1999, 2009; Duranton 2006; and Rossi-Hansberg and

赖特 2007.

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Evolution of the Size and Industrial Structure of Cities in Japan 107

heterogeneity of industries and the demand externalities across industries do not
automatically result in the hierarchy principle.18

The power law for city-size distribution depends critically on the shape of
the distribution of substitution elasticities as suggested by Akamatsu et al. (2017).
Although the observed distribution of substitution elasticities (or more generally
that of scale economies) based on the Broda and Weinstein (2006) data is consistent
with the power law, the underlying mechanism is still an open question.

乙.

Policy Implications

It has been shown that the size and industrial structure of cities in Japan
have maintained tight regularities despite the substantial churning of population
and industries across cities over time.19

Persistent Power Law for City-Size Distributions

It has been shown that the size distribution of cities exhibits a persistent
power law over the 30-year review period (section IV.A) despite substantial
reorganizations of the city structure through the integration of nearby cities as well
as the redistribution of populations among cities (section II).

Evidence presented in section II suggests that

the latter redistribution
of population is partly accounted for by the uneven improvement of transport
accessibility brought about by the nationwide expansion of high-speed railway
and highway networks. The objective of this public infrastructure investment
was to correct regional disparities and carry out balanced development under
the Government of Japan’s Comprehensive National Development Plan. 虽然
larger population sizes do not necessarily imply higher welfare, it is indeed often
the case (看, 例如, Bettencourt and West 2010, Bettencourt 2013).

然而,

the persistence of the power law exhibited by the city-size
distribution implies that the regional disparity is unlikely to disappear in the wake
of such policies since cities can grow only at the cost of other cities so that the
distribution of the relative size of cities is preserved, although individual cities may
experience adjustments in their size rankings. Better accessibility between the core
and peripheral regions does not necessarily induce growth in the peripheral regions,
although it was the original intention of Japan’s development policy. 实际上, postwar
transport network development in Japan has always favored Tokyo as the network
was essentially designed to improve accessibility to Tokyo, which in turn has made
Tokyo even more disproportionately large rather than helping smaller cities to catch

18Another very different approach to replicate the spatial distribution of economic activities resorts to

variations in the ﬁrst-nature advantage of locations. 看, 例如, Desmet, Nagy, and Rossi-Hansberg (2017).

19The implications discussed here may be less relevant for developing countries in which urban

agglomerations are not the representative form of economic locations.

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108 Asian Development Review

向上. 在实践中, the feasible way to achieve equality among regions may be through
interregional transfers.

Hierarchy Principle

When industrial

location is considered within the city system,

这
computation of hierarchy shares in section IV.B indicates that roughly 70% 的
location patterns of individual industries are consistent with the hierarchy principle
at each point in time. Given the substantial churning of industries among cities
(an average of 30%), this percentage is quite high, which in turn suggests that
coordination takes place relatively instantaneously. From the observed NAS rule
and the theoretical models discussed in section V.A, the spatial coordination of
industries and the prevailing heterogeneity of scale economies among industries
may be responsible for the realized persistency of the power law for city-size
分配. If the hierarchy principle is an outcome of the spatial coordination
among many industries via cross-industry positive externalities as in the central
place models, then there seems to be little room for any policy by an individual city
or region to have a large inﬂuence on the location behavior of a speciﬁc industry.

同时, it is also true that as many as 30% of the realized industrial
locations deviate from the hierarchy principle. Since the location patterns of these
industries are relatively independent, other things being equal, place-based policies
targeting these industries should be more effective. 数字 17 shows the distribution
of the counts of industries which are present in a given city but not present in more
比 70% of cities that are larger than this given city. The ﬁgure shows only the cities
that have at least one such industry deviating from the hierarchy principle, 在哪里
the darker colors represent the presence of a larger number of such industries. 这
names of cities together with the names of deviating industries in parentheses are
indicated for selected cities. The place-based policies targeting these industries in a
given city may be less constrained by the spatial coordination with other industries
and they may contribute to improve the relative advantage of this city.

不出所料, the industries that deviate from the hierarchy principle
tend to reﬂect strong natural advantages of location. Concentrations of musical
instruments manufacturing, 例如, are often tied to the availability of wood
resources and dry weather. 相似地, clay refractories manufacturing is tied to
ceramics- and pottery-producing districts. Some industries such as aircraft, watches
and clocks, and leather- and fur-related manufacturing may also have historical ties
to speciﬁc locations.

It is also worth investigating the set of industries that exhibit a high degree
of consistency with the hierarchy principle. Under the hierarchy principle, each
city has the entire set of industries that are present in any smaller city. 因此, 如果
industrial location patterns are highly consistent with the hierarchy principle, 然后
the industries that are present in the majority of smaller cities would also likely

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Evolution of the Size and Industrial Structure of Cities in Japan 109

数字 17. Industries Deviating from the Coordination in 2010

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来源: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan.
2009. “Economic Census for Business Frame.”

be found in a given city. 因此, other things being equal, such industries may be
attracted with less effort. This is rather intuitive since industries that are present
in smaller cities are the more ubiquitous ones that seek proximity to consumers.
They are also likely to be present in larger cities associated with a larger consumer
人口.

数字 18 shows the distribution of the counts of industries that are absent in
a given city but are present in more than 70% of cities smaller than this given city,
where the darker colors represent the presence of a larger number of such industries.
The names of cities together with the names of absent industries in parentheses are
indicated for selected cities.

Although it is beyond the scope of this paper, in order to identify the set
of potential industries to be attracted in a given city in practice it is important
to control for the location determinants of the potential industries. 例如,
while there are a large number of cities that are specialized in seafood products
manufacturing, these cities are typically located along the coast. Although seafood
products manufacturing is one of the most ubiquitous industries and it is likely to
be found in many sufﬁciently large cities with larger markets, it is unlikely for an
inland city to attract this industry.

六、. Concluding Remarks

This paper investigates the evolution of the city system in Japan between
1980 和 2010 with regard to population size and industrial structure. It offers

110 Asian Development Review

数字 18. Potential Industries to be Attracted to Each City in 2010

来源: Author’s calculations based on Statistics Bureau, Ministry of Internal Affairs and Communications of Japan.
2009. “Economic Census for Business Frame.”

evidence for key stylized facts about the presence of constant churning and
persistent regularities in the distribution of population and industries among cities.
With regard to city-size distributions, the ﬁndings of this study are not
particularly new. Power law properties at the country level are already widely
公认的, together with city-size volatility (看, 例如, Batty 2006). 在里面
case of Japan, the development of a nationwide transport infrastructure appeared to
have a certain inﬂuence, with the growth and decline of cities reﬂecting differences
in the relative advantage in transport access among cities.

A novelty of this study is that it shows the persistent correspondence between
the population size and industrial structure of each individual city in the form of the
hierarchy principle under the constant churning of industries across cities. 这,
反过来, implies that the spatial coordination of agglomerations among industries
may be playing a key role in the prevailing diversity of city sizes and their power
law properties. While the frequent churning of industries among cities and of their
establishments has been reported in different contexts (看, 例如, Dumais,
Ellison, and Glaeser 2002; Duranton 2007), this study is unique in that both the
churning and coordination of industries are expressed in terms of the presence of
agglomerations of individual industries in each city. 因此, these phenomena can
both be considered to be the properties of industrial agglomerations.20 While the
fact that the majority of industries follow the hierarchy principle is an important
constraint in designing place-based industrial policies, it can also help identify the
most effective industries to promote in each city.

20看, 例如, Schiff (2015) and Davis and Dingel (2014) for related research focusing on the presence

of industries (rather than specialization) in each city.

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Evolution of the Size and Industrial Structure of Cities in Japan 111

As for the power laws for city-size distributions, which hold together with
the hierarchy principle, the central place models (Hsu 2012; Akamatsu, 森, 和
Takayama 2016) place the responsibility on the underlying distribution of scale
economies across industries. 实际上, the distribution of substitution elasticities
of imports in the United States are consistent with the power law for city-size
分布 (Broda and Weinstein 2006), although the underlying mechanism
that results in the observed distribution of substitution elasticities is an open
question.21

The mechanism behind the churning of industries across cities is another
open question. The change in the number of agglomerations is signiﬁcantly
inﬂuenced by the sensitivity to transport costs, in keeping with the existing theories
of agglomeration (Akamatsu et al. 2017). Consistent with these theories, 森,
Mun, and Sakaguchi (2017) have shown that industries disperse more (号码
of agglomerations increases) if they became more sensitive to transport costs, 在哪里
the sensitivity to transport costs for each industry is measured by the shipment
cost for a unit distance for a unit product value of this industry. They show that
之间 1995 和 2010, the log of sensitivity to transport costs ranges from −2 to
3, with an average of 0.01 and a standard deviation of 0.79. 因此, while no simple
tendency is observed for the importance of transport costs for industries, 他们的
ﬁnding is consistent with the churning of industries across cities observed in this
学习. 然而, the sources of the variation in the sensitivity to transport costs are
diverse and include changes in shipment technologies; the increasing dominance of
internet communications; and changes in production technologies, exchange rates,
and product cycles. 最后, the investigation of the causes of industry churning and
the distribution of the prevailing scale economies are left for future research.

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*The Asian Development Bank recognizes “China” as the People’s Republic of China.

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为了

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