Transcript Factors Related to Women*s Participation in a Cervical Cancer

Enhancing Innovation and
Competitiveness
-Economic Effects of Agglomeration and
Human Capital at the Local LevelYasutaka Saeki
Kwansei Gakuin University
Tampere, Finland,
September 11th, 2013
Table of Contents
1. Introduction
2. Literature Review
3. Economic Model
4. Empirical Study (1) Industrial agglomeration
(2) Labor Productivity
5
Outflow of foreign experts from Japanese society
6
Summary & Policy recommendation
1 Introduction
• With the growing presence of emerging economies in the
world economy, local areas in Japan are undergoing great
changes. Local areas in Japan that are experiencing
depopulation and growing labor mismatches as
youngsters tend to move to large cities. At the same time,
they have faced with severe competition with emerging
economies especially in Asia.
• Therefore, we have to seek for ways to reinvigorate
competitiveness of industries at the local levels. A key
strategy may be 1) to create and maintain industrial
agglomeration while promoting production
fragmentation . Another is 2) to enhance productivity
through innovation at the local level.
The construction of this presentation is
1) Literature Review on local development,
2) establishing a production function at the local level for
analyzing agglomeration and productivity taking into account of
labor market mismatches,
3) econometric analysis on determinants of agglomeration and
labor productivity at the local level
4) summary and policy recommendation .
2 Literature Review
Concerning industrial agglomeration at the local level:
• Reindustrialization at the local level and its
determinants (Iguchi, 2012)
Concerning mismatches in the local labor market
• Japanese descents are more likely to contribute to the
economic development because they are flexible
workforce. (Iguchi, 2009, 2010)
Concerning changes in migration trends
• Brain drain (Bloom et al., 2006) vs. Brain Circulation
(Saxenian, 2005)
• Research on local development from the aspect of
competitiveness has been very limited.
• Migration can mitigate mismatches in the local labor
markets. However, the research of the impact has not
been enough so far.
Therefore,
The uniqueness of this study is to explore possibilities
to improve competitiveness at the local level through
industrial agglomeration and productivity
improvements.
3 Economic Model
L=LP – LH + LF
where Lp potential labor force
LH: Mismatched labor
LF: Foreign labor
This says that the supply of foreign labor force can
mitigate labor market mismatch, especially at local
economy that faces outflow of younger generations.
Production function at the local level :
Yi = AiKiαLiβ (α+β>1)
Ai: constant Ki: capital Li: Labor
Then we induce:
Y/L=AKαθLβ-1 (α+β>1 )
θ: Quality of labor
θ>1: more skilled labor
0<θ<1: less skilled labor
With the improvement of the quality of labor (Human Capital),
the productivity of the local economy can be enhanced.
Methodology
• We measure the productivity and output per prefecture with
the data of Industrial Statistics (METI) .
• In order to test our hypothesis, we collect the number of
Brazilians as flexible labor force and Foreign experts from
Foreign Residents’ Statistics of Ministry of Justice.
• We employ the list of prefectures which have international
schools as a proxy variable for the social integration.
4 Empirical Study (1)
Industrial agglomeration
Net Added value of industry＝a₀＋a₁ X₁ ＋a₂ X２＋ a₃ X３ ＋
a₄ X４＋a₅ X５ ＋a₆ X６ ＋ a7 X7 ＋ a8 X8 ＋ｕ （u=residual）
X１ ：Rate of manufacturing (proxy for the industrial agglomeration)
X2 ：Brazilian people (flexible labor force)
X3 : Foreign experts
X4 : Net stock of capital
X5 : Exchange rate of Yen against US Dollars
X6 ：Direct Investment on China (proxy for fragmentation)
X7 : Price of land for industrial use
X8: :Dummy variable for the location of international school, such as
American school, Chinese school, and Brazilian school
Model
Coefficient
Constant
T-value
Significance
-3.652
.000
Rate of Manufacturing
.108***
3.530
.008
Brazilian
.811***
23.620
.000
Foreign experts
• Foreign
workers has contributed
to the production
at
.078***
2.058
.040
local economies, and enhancing the human capital of
them would be beneficial
for local municipality.
Stock of Capital
.121***
4.357
.000
Education and job training as an “investment” should be
Exchange rate
of Yen against US $
.077***
3.328
.001
considered.
• Though social integration doesn’t directly influence on
Direct Investment
on China
productivity,
that would
be necessary for attracting
.047**
2.019
foreign talents.
.044
• Longitudinal database of social integration policy and
.122***
3.104
.002
competitiveness should be established for deeper analysis.
Price of land for industrial use
International School
.224
7.700
.000
Results
• Agglomeration (proxy variable, rate of manufacturing)
contributes to the increase of value-added of industries.
• Brazilians (low skill) contributes to the increase net
value-added.
• Foreign experts (high skill) also enhance the valueadded of industries.
4 Empirical Study (2)
Productivity
Net Added value of industry＝a₀＋a₁ X₁ ＋a₂ X２＋ a₃ X３ ＋
a₄ X４+a₅ X５ +a₆ X６ + a7 X7+a8X8 +a9 X9 +ｕ （u=residual）
X１ ：Rate of manufacturing (proxy for the industrial agglomeration)
X2 ：Net stock of capital per employee
X3 : Log Brazilian people (flexible labor force)
X4 : Log Foreign experts
X5 : Log number of net employee of each municipality
X6 : Exchange rate of Yen against US Dollars
X7 ：Direct Investment on China (proxy for fragmentation)
X8 ：Unemployment Rate
X9: :Dummy variable for the location of international school, such as
American school, Chinese school, and Brazilian school
Model
Coefficient
Constant
T-value
Significance
5.909
.000
Rate of Manufacturing
.869***
14.997
.008
Log Brazilian
-.686***
-8.134
.000
• Foreign workers has contributed to the production at
Log Foreign experts
.983*** the human capital
11.959 of
.000
local economies, and enhancing
them would be beneficial for local municipality.
Log total number
of employee
-3.609
Education
and job training-.275***
as an “investment”
should be .764
considered.
Exchange rate of Yen against US $
.284***
7.819
.000
• Though social integration doesn’t directly influence on
productivity, that would be necessary for attracting
Direct Investment
China
.233***
5.949
.000
foreignontalents.
• Longitudinal database of social integration policy and
competitiveness should be established for deeper analysis.
Unemployment Rate
International School
‐.205***
‐3.843
.088
.051
.829
.626
Results
• Foreign experts have a positive impact on productivity
• Brazilian (proxy variable of low skill) shows negative impact
on productivity
• The impacts of proxy variables of social inclusion
(international school) are not statistically significant.
• Devaluation of exchange rate, the ratio of manufacturing
(proxy for agglomeration), direct investment on China have
a positive impact on the productivity.
Annex 2: Case of Cluster with high human
capital
• Glaeser (2011) describes the way how Bangalore and
Nagasaki attracted bright talents, and create new business
and innovation.
• Bratti and Leombruni (2009) emphasize the importance
of local human capital and their exterality through the
case of Italian manufacturing.
Outflow of Human Capital
from Japan
Table 1. Specialist in humanities
Year
Inflow
Outflow
Difference
Status Change
Stock
2002
101,178
102,196
-1018
727
40861
2003
98,312
99,287
-975
1949
44496
2004
112,828
114,705
-1877
2378
44493
2005
126,137
126,931
-794
3417
47682
2006
132,843
134,103
-1260
4159
57323
2007
142,643
145,134
-2491
5938
61763
2008
144,478
147,211
-2733
7304
67291
2009
145,217
147,498
-2281
7863
69395
2010
147,215
149,643
-2428
6677
68467
2011
159,786
164,805
-5019
5422
51687
Source: Ministry of Justice
Table 2. Engineer
Year
Inflow
Outflow
Difference
Status Change
Stock
2002
40,446
40,700
-254
727
19439
2003
39,013
39,502
-489
849
20717
2004
47,836
47,459
377
1233
20807
2005
56,127
54,118
2009
1200
23210
2006
66,929
64,476
2453
1720
35135
2007
81,121
77,509
3612
2314
44684
2008
87,214
86,093
1121
2414
53373
2009
82,514
85,560
-3046
2154
50493
2010
78,494
80,862
-2368
1390
46592
2011
87,557
90,830
-3273
1670
39227
Source: Ministry of Justice
Change of the stock of engineer
and specialist in humanities
80000
70000
60000
50000
Engineer
40000
Humanity
30000
20000
10000
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Source: Ministry of Justice
5 Summary and conclusion
• Foreign workers (low/high) have contributed to the increase of the
production of value-added of industries. Foreign experts also can
enhance the productivity. However, the outflow of foreign experts
have overweighed the inflow in the past ten years.
• Therefore, both of attracting and retaining foreign workers are
indispensable. In addition, enhancing human capital is necessary for
the competitiveness of cities, in particular, for local areas that has
experienced depopulation and growing labor mismatches. Education
and job training for foreign children/youth/job seeker in their native
language should be also considered.
• The impact of social integration policy on production/productivity
has not been clearly described. Because of the data limitation,
another approach, such as case study need to be considered.
Selected reference
• Borjas, G, J. (2008). Labor Economics (6th ed.). New York, NY:
McGraw Hill
• Bodvarsson, B, O. & Van den Berg, H. (2011). The economics
of Immigration Theory and Policy. New York, NY: Springer
Science + Business Media
• Edward L. Glaeser, “What do they Make in Bangalore?” in
Triumph of the City, Penguin Press, 2011, chapter 1.
• Hasegawa, R. Determinants of mismatches of high school
graduates in local area. Kwansei Gakuin univerisy industrial
research center. (38). 69-80.
• Iguchi, Y. (2011). Economics of intergenerational interest.
Tokyo, Japan. Yachiyo publishing.
• Massimiliano Bratti and Roberto Leombruni, “Local Human
Capital Externalities and Wages at the Firm Level: The Case
of Italian Manufacturing,, IZA Working Paper No. 4613,
Bonn: Institute for the Study of Labor, December 2009.
• Rivera-Batiz, F. (1987). Increasing Returns, monopolistic
competition, and agglomeration economies in consumption
and production. Regional science and urban economies (18). 125133.
Thank You