Overview

Against a backdrop of declining public investment and a shrinking population, pessimism over the future trend of the regional economies has been persistent, but a survey of business sentiment in recent months reveals that business sentiment in some regions, including the Tokai, Kinki and Kyushu regions, has seen a greater improvement than in the Tokyo area. One possible reason is that the economic pulling power of exports in these regions has increased.

Regions where the pulling power of exports is strong have three characteristics: (i) a high degree of export dependence together with a high concentration of export industries, (ii) a high ratio of exports going to Asia, whose economic growth rate remains high, and (iii) a high ratio of products with high income elasticity.

An examination of export dependence in terms of the ratio of the value of exports to the total output of the region reveals that in regions where the economic pulling power of exports is high, the ratio is above the national average. The ratio is particularly high in the Tokai Region, at 20%. Another important factor is that the concentration of export industries in these regions is high, so that the pulling power of exports in these regions tends to be still higher.

A survey of export destinations reveals that in regions where the pulling power of exports is high, the share of exports shipped to Asia, which continues to enjoy rapid economic growth, tends to be higher. The share of exports shipped to Asia has risen sharply since 1990, especially in the Kyushu and Chugoku regions.

In terms of exported products, the income elasticity of electrical machinery and chemicals is high, and in regions where the economic pulling power of exports is high, the share of these products within exports tends to be higher. In the Kyushu Region in particular, the share of both products has risen sharply since 1990 against the backdrop of a concentration of high-tech industries such as semiconductors.

Looking to the future, given that (i) overseas markets are likely to grow faster than domestic markets and (ii) it is easy to expand supply by enhancing productivity, even at a time of population decline, the importance of export industries to the regional economies is likely to grow still further. Under these conditions, if the regional economies are to use exports as a means of expansion, it is important that they set about fostering export industries with a view to establishing an export structure centering on products aimed at the Asian markets, which are expected to see continued rapid growth, and products with high income elasticity.

* Copies of this document are available from the Economic and Industrial Press Club.

For more information on the content of this report, please contact: Hideki Matsumura Ishikawa the Japan Research Institute, Limited.

Tel: 03-3288-4524
E-mail：matsumura.hideki@jri.co.jp

Copyright© The Japan Research Institute, Limited