Page 154 - Special Topic Session (STS) - Volume 2

STS474 Gigih F. et al.

Fig 6. Regional Economic Growth Rate in Japan: Before and After Crisis

BOJ (2008) reported the declining in manufacturing production, business
investment, and private consumption weakens regional economic growth. As
the production and consumption declines, we had a further declining impact
of the crisis. This spread-out affected almost all prefectures in Japan.

Fig 7. The regional economic trend comparison before (left) and after (right)
breakpoint in Japan.

Based on Fig 7, most prefectures show recovery after the improvement in
manufacturing production and business environment throughout Japan (BOJ
Report, 2014). However, there are several prefectures that show negative trend,
such as Fukui and Nagasaki prefectures. This trend in Nagasaki prefecture
mainly affected by decline in the ship building industry, fisheries industry, and
small enterprise (Miyao, 2014).
Even though we did not observe the structural change in Japan case based
on F-test, but the widespread for the impact of Lehman’s shock supported by
the spatial correlation coefficients in Fig 8. The results indicate the growth rate
in the neighboring prefectures induced each prefecture’s economic growth in
the same direction.
Wald test cannot be conducted in Japan data due to the small sample size
(Greene, 2012). In our case, we only have sample size = 13 with = 7 and
1
= 6, which is too small for the requirement.
2

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