An Analytical Model of Panel Data on Inland Prefectures of Japan An Analytical Model of Panel Data on Inland Prefectures of Japan Shoichi KANEKOa*, Takaaki KAWANAKAb, Nyunho Jungc Hiroshi YAMASHITAd, Masanobu MATSUMARUe aFaculty of Business Administration, Yamanashi Gakuin University, 2-4-5 Sakaori, Yamanashi 400-8575, Japan bGraduate School of Engineering, The University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo, 113-8654 Japan cFaculty of Business, The University of Fukuchiyama, 3370 Hori, Fukuchiyama, Kyoto, 620-0886 Japan dDepartment of Commerce, Meiji University, 1-1 Kanda-Surugadai, Chiyoda-ku, Tokyo, 101-8301 Japan eMechanical and Industrial Engineering Department, 3-27-1 Rokkakubashi, Kanagawa-ku, Yokohama-shi, Kanagawa, 221-8686 Japan Abstract In Japan, administrative divisions are classified in 47 prefectures. Among them, eight that do not face the sea are designated as “inland prefectures.” These inland prefectures are considered to have different prop- erties than “coastal prefectures”—those that face the sea. Therefore, in this study, we quantitatively ana- lyze the influence of several factors on the value of manufactured goods shipments from inland and coastal prefectures, based on our previous studies. These factors include population, area, value of forestry goods shipments, value of fishery goods shipments, presence of ordinance-designated city, before and after the collapse of the bubble economy, before and after the Lehman shock, and so on. This analysis model is characterized by handling time series quantitative and qualitative data. We validate the model by conduct- ing an empirical analysis using panel data. Furthermore, we attempt to quantitatively grasp the common points and differences between the industrial structures of inland and coastal prefectures, based on esti- mates of parameters obtained from the empirical analysis. Keywords: Inland prefecture, Coastal prefecture, Statistical data by prefectures, Panel data for an analysis model, Industrial structure 1. Introduction are presented with a framework (Japanese Inland Prefec- ture Classification Framework [1]) that classifies them Japan is composed four main islands—Hokkaido, Honshu, into four categories. Shikoku, and Kyushu (Figure 1). Further, Japan is an elon- As a result, the inland prefectures with a large area (Na- gated island country, and because the distance between its gano and Gifu) naturally have a large population and large bordering waters (i.e., the Pacific Ocean and Sea of Japan) agricultural and industrial shipment values. Among inland is short, most prefectures are “coastal prefectures” that prefectures with a small area, those in the Kanto plains face the sea. However, in the Honshu regions where the have a large population and large agricultural and indus- Pacific Ocean and Sea of Japan are relatively far apart— trial shipment values. In comparison, inland prefectures in that is, in the Kanto, Chubu, and Kinki districts— “inland which plains are replaced by basins are few. prefectures” that do not face the ocean exist. Such are the Based on the above-mentioned prior study, the indus- Tochigi, Gunma, and Saitama prefectures in the Kanto trial shipment values for coastal and inland Prefectures in district; Nagano, Yamanashi, and Gifu prefectures in the Japan are affected by factors such as population, area, Chubu region; and Shiga and Nara prefectures in the presence or absence of designated cities, before and after Kinki district—a total of eight prefectures (Figure 1). the collapse of the bubble economy, and before and after As a matter of course, the above-mentioned inland pre- Lehman shock. The collapse of the bubble economy and fectures have common traits (special characteristics dif- the Lehman shock had a great impact on the economy [2]. ferent from other prefectures—for example, very small Therefore, we propose a “panel data analysis model” to “catch height”) that arise from not facing the ocean. How- quantitatively analyze the influence of these factors [3,4]. ever, the eight inland prefectures also have specific differ- In this study, the validity of the proposed model is verified ences. The authors [1] pointed out the specialty and diver- by conducting an empirical analysis using panel data. Fur- sity of these inland prefectures and noted that the Nak- thermore, we attempt to understand the common points asendo and Koshu Kaido were developed in the Edo pe- and differences between the industrial structures of riod as a historical factor that established inland Japan. coastal and inland prefectures using the parameter esti- Along with the area and presence or absence of a plain, mates obtained from this empirical analysis. the eight inland prefectures with diverse characteristics *Corresponding author: [email protected] Vol. 12 No. 1 (2020) - 1 - Shoichi KANEKO, Takaaki KAWANAKA, Nyunho JUNG, Hiroshi YAMASHITA, Masanobu MATSUMARU riculture (especially vegetables) and industry. Addition- ally, agriculture and manufacturing industry are develop- Hokkaido ing simultaneously because they are near to the consump- tion areas of the big cities. In Nagano prefecture—which corresponds to ②—there are many businesses operators Honshu Gunma that develop agriculture and industry simply because the Na- land is so vast. However, it can be pointed out that in addition to ②, Gifu Tochigi the development of the precision machine industry aiming Shiga at the “Switzerland of Japan” greatly contributes to man- Saita ufacturing industry in Nagano prefecture. On the other North Yamanashi hand, in Yamanashi, Shiga, and Nara prefectures, both ① Nara ② Shikoku and are not satisfied, and both agriculture and manu- facturing industry are not well developed. Therefore, even Oki- Kyushu with the same designation of inland prefecture, the eight prefectures have different diversity as well as common points in terms of population, topography, and industry. Figure 1 Map of Japan and 8 inland prefectures 3. Inland prefectures in Japan and 2. Specialty and diversity of inland the five main roads of the Edo pe- prefectures in Japan riod of Japan Japan is surrounded by the oceans and has the character- istic of slender national land. Most prefectures in Japan, As many large cities in Japan have been formed and de- therefore, face the ocean. However, eight prefectures that veloped in coastal areas—such as Tokyo, Osaka, Nagoya, do not face the ocean—inland prefectures—have different Yokohama, Kobe, Fukuoka, Hiroshima, and Sendai—the characteristics from the others. The remarkable specialty inland prefectures tend to be overlooked in terms of such of inland prefectures is that the number of fishery workers development by all means is there. However, for an inland is very small and there are few large cities. Specifically, prefecture to be established as an independent prefecture, inland prefectures have no cities with a population of it must have a suitable industrial scale and populous city 500,000 or more—except for Saitama city in Saitama pre- (for example, the prefectural capital). fecture. Furthermore, the only prefectures having cities As described above, the inland prefecture, which tends with a population of 400,000 or more are Tochigi to be left behind in the development of cities and indus- (Utsunomiya city) and Gifu (Gifu city). It is self-evident tries, as a historical factor leading to the establishment as that the number of fishermen in inland prefectures is very an independent prefecture, has been developed in the five small, but the fact that there are few populous cities is be- roads [1]. These roads were called Tokaido, Nakasendo, cause large Japanese cities are formed along the coast. Koshu Kaido, Oshu Kaido, and Nikko Kaido. These five However, the population of five inland prefectures— roads were called “Gokaido” in Japanese (Figure 2). All excluding Yamanashi, Shiga, and Nara Prefecture— of the above 5 roads pass through the current inland pre- reaches more than 1.5 million people, and the population fecture, and five inland roads were in communication with of Saitama Prefecture is more than 7 million people (the seven inland prefectures other than Nara prefecture. fifth in Japan). Therefore, it cannot be said that the popu- Among other things, Nakasendo passed through five pre- lation of inland prefectures is small. For this reason, the fectures (Saitama, Gunma, Nagano, Gifu and Shiga pre- authors [1] point out the following factors: ① Saitama, fectures) out of the eight inland prefectures. The old road Tochigi, and Gunma prefectures are located in the Kanto was significant in the development of central Honshu (in- plain, which is more populous than the mountainous areas. land). Meanwhile, there is a historical factor that the cap- ② Nagano prefecture is located in the mountains, but the ital of Japan (Heijokyo) was located also in Nara Prefec- area is large. Gifu prefecture has both the plain of ① and ture, the only inland part where five old roads do not pass. the population of ②. On the other hand, the populations The five roads of the Edo period were the main roads at of Yamanashi, Shiga, and Nara prefectures are small, as the time, around which cultural spheres and industrial they do not fall under either ① or ②. zones were formed [1]. As such, cultural and industrial In prefectures that face the ocean, agriculture and man- areas worthy of the current prefectures were formed. ufacturing industry are generally a trade-off, but in the in- From the contrary viewpoint, had the five roads not been land prefectures, the following unique