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Economies of Density and Productivity in Service Industries: An Analysis of Personal Service Industries Based on Establishment-Level Data

Year: 2010

Type: article

Abstract: This study aims to empirically investigate the determinants of service industry productivity, such as economies of scale and economies of density. By using establishment-level data related to personal service industries in Japan, the study estimates the production functions for both value-added and physical output measures. In almost all the service industries examined, significant economies of scale and economies of density are observed, wherein productivity increases by 7% to 15% when the municipality population density doubles. These findings are confirmed by an estimation in which the measures of physical output are considered instead of value added.

Source: The Review of Economics and Statistics

DOI: 10.1162/rest_a_00065

Author: Masayuki Morikawa

Institution: Research Institute of Economy, Trade and Industry

Language: English

Topic: Regional Economics and Spatial Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: green

OpenAlex ID: W1973383486