Interregional Interdependence and Regional Economic Growth: An Interregional Input-Output Analysis of the Kyushu Region

The main objective of this paper is to examine the effects of the changes in economic conditions and government policies on the output growth of the Kyushu region between 1965 and 1990. This study uses the extended growth-factor decomposition method based on a three-region Japanese interregional input-output system consisting of Kyushu, Kanto, and the rest of Japan. The growth pattern of Kyushu changed noticeably over the period. The primary drivers of growth changed from the expansion of final demand within Kyushu to direct and indirect effects from outside Kyushu. This unambiguously indicates that Kyushu has facilitated interregional and international interdependence. The emergence of the processing and assembling sector, together with the construction of new networks of trunk railway lines, expressways, and communications, promoted closer interregional industrial linkages between Kyushu, Kanto, and the rest of Japan. In addition, the offshore transfer of production from Kyushu to Southeast Asia after the Plaza Accord Agreement strengthened Kyushu's international industrial linkages.