Economic Complexity of Prefectures in Japan

Chakraborty A, Inoue H, Fujiwara Y (2020) Economic complexity of prefectures in Japan. PLoS ONE 15(8): e0238017. https://doi.org/10.1371/journal.pone.0238017

21 Pages Posted: 8 Mar 2020 Last revised: 31 Aug 2020

See all articles by Abhijit Chakraborty

Abhijit Chakraborty

University of Hyogo - Graduate School of Simulation Studies; International Institute for Applied Systems Analysis (IIASA) - Advanced Systems Analysis; Complexity Science Hub Vienna

Hiroyasu Inoue

University of Hyogo - Graduate School of Simulation Studies

Yoshi Fujiwara

University of Hyogo - Graduate School of Simulation Studies

Date Written: February 12, 2020

Abstract

Every nation prioritizes the inclusive economic growth and development of all regions. However, we observe that economic activities are clustered in space, which results in a disparity in per-capita income among different regions. A complexity-based method was proposed by Hidalgo and Hausmann [PNAS 106, 10570-10575 (2009)] to explain the large gaps in per-capita income across
countries. Although there have been extensive studies on countries' economic complexity using international export data, studies on economic complexity at the regional level are relatively less studied. Here, we study the industrial sector complexity of prefectures in Japan based on the basic information of more than one million firms. We aggregate the data as a bipartite network of prefectures and industrial sectors. We decompose the bipartite network as a prefecture-prefecture network and sector-sector network, which reveals the relationships among them. Similarities among the prefectures and among the sectors are measured using a metric. From these similarity matrices, we cluster the prefectures and sectors using the minimal spanning tree technique.The
computed economic complexity index from the structure of the bipartite network shows a high correlation with macroeconomic indicators, such as per-capita gross prefectural product and prefectural income per person. We argue that this index reflects the present economic performance and hidden potential of the prefectures for future growth.

Keywords: economic complexity, bipartite network, economic complexity index, per-capita gross prefectural product, prefectural income per person

JEL Classification: P00, D85, L00

Suggested Citation

Chakraborty, Abhijit and Inoue, Hiroyasu and Fujiwara, Yoshi, Economic Complexity of Prefectures in Japan (February 12, 2020). Chakraborty A, Inoue H, Fujiwara Y (2020) Economic complexity of prefectures in Japan. PLoS ONE 15(8): e0238017. https://doi.org/10.1371/journal.pone.0238017, Available at SSRN: https://ssrn.com/abstract=3536692 or http://dx.doi.org/10.2139/ssrn.3536692

Abhijit Chakraborty (Contact Author)

University of Hyogo - Graduate School of Simulation Studies ( email )

7-1-28 Minato-jima, Minami-machi
Chuo-ku
Kobe, Hyogo 650-0047
Japan

International Institute for Applied Systems Analysis (IIASA) - Advanced Systems Analysis ( email )

Schlossplatz 1, A-2361 Laxenburg, Austria

Complexity Science Hub Vienna ( email )

Josefstädter Straße 39
Vienna
Austria

Hiroyasu Inoue

University of Hyogo - Graduate School of Simulation Studies ( email )

7-1-28 Minato-jima, Minami-machi
Chuo-ku
Kobe, Hyogo 650-0047
Japan

Yoshi Fujiwara

University of Hyogo - Graduate School of Simulation Studies ( email )

7-1-28 Minato-jima, Minami-machi
Chuo-ku
Kobe, Hyogo 650-0047
Japan

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