An Analysis of Regional Production Activity Using Regional Connection Indexes

This paper examines the relation between connection economy and economic activity of a region. There are two types of connection economy: the city system economy and the reginal connection economy. The paper indirectly estimates the effects of the connection economies on the regional economic activity because it is difficult to directly measure influence of these economies on economic activity. First, it divides the 47 prefectures of Japan into 4 categories. And it classifies the prefectures belonging to each of the 4 categories into 4 groups using the regional connection indexes created on the basis on branch factories and sales offices. And then, the paper estimates the effects of the connection economies on regional economic activity. The estimation suggests the followings. The economic activities of the prefectures that play a major socio-economic role in Japan have low regional connection based on sales offices and have high regional connection based on branch factories. On the other hand, the economic activities of the prefectures that do not enjoy abundantly the city system economy and the connection economy based on people flow amount have high the regional connection based on sales offices. Those of the prefectures adjacent to the Tokyo and Osaka prefecture have low regional connection based on sales offices