Title

Productivity distribution, firm heterogeneity, and agglomeration: Evidence from firm-level data

Abstract

This paper empirically examines how productivity distributions of firms vary across regions based on Japan's manufacturing census data. We find that firm productivity is distributed with wide dispersions, especially in core regions. Our firm-level estimates demonstrate that the productivity distribution of firms tends to be noticeably left-skewed, deviating from the normal distribution, especially in regions with weak market potential but also in agglomerated or urbanized regions. These findings suggest that agglomeration economies are likely to accommodate heterogeneous firms that co-exist in the same region.

Keywords

agglomeration; productivity; gamma distribution; heterogeneity; firm-level data

JEL Classification

L11; R12

Inquiries

Toshihiro OKUBO
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059

Eiichi TOMIURA
Department of Economics, Yokohama National University