This article examines the sources of regional economic growth in Japan by using an extended growth-factor decomposition method based on an interregional input-output model. The extended formula avoids some problems of shift-share analyses and measures the roles played by interregional and interindustry linkages in the growth of a regional economy. This method can identify growth factors that originate outside a region as well as those that originate from within. Applying the method to Japanese interregional input-output tables reveals that interregional interdependence has exerted notable effects on regional economic growth in Japan and that regions are becoming more interdependent.
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