Dynamics of agglomeration economies and regional industrial structure: The case of the assembly industry of the Greater Tokyo Region, 1960–2000

In this paper, using census data from the assembly industry during the period 1960–2000, we attempt to expand the knowledge about how innovation and imitation lead to the exploitation of long-term subcontract networks and agglomeration economies; thus having an effect on an improvement in productivity. To this end, a data envelopment analysis is employed to decompose productivity into innovation and imitation. The main findings make it evident that as time passes innovation most noticeably tends to occur towards the outskirts of the core area, and that the level of efficiency readily improves in areas where the division of labor is advanced by relatively small establishments.