Abstract

This paper analyzes the determinants of per capita income growth in the Japanese regional economies utilizing the freamework of "new" growth theory. The regression analysis is conducted by using the 47-perfecture cross section data set in FY1996-FY2005. According to th results of this regression analysis, although unconditional convergence cannot be observed, conditional convergence can be observed significantly with some control variables including investment-GDP ratio, population growth, employment-population ratio, and labor productivity. It is worth nothing that labor productivity, which explains the differences of industrial structures, technology, culture, etc. among regions, is very significant in explaining per capita income growth. In addition, exmployment -population ratio, which explains the situation of an aging population structure, labor market and so on, is also significant. However, the rate of convergence is very limited at 1.232 per cent per annum. It seems therefore per capita income disparities among 47 prefectures cannot be reduced in the short-run without strong policies.