Agglomeration Economies Widen Regional Disparities, Threaten Equitable Growth
The chapter looks at how groups of businesses in one area can help regions grow economically and reduce differences in prosperity. By studying Japanese region data, it was found that when businesses group together, they boost economic growth. This grouping is more beneficial for industries that make products and can help regions with lower productivity catch up. But it may widen the gap between regions in service-oriented industries. So, having more service businesses might cause economic differences to grow among regions.