Abstract

Many municipal governments are devising industrial promotion policies that appropriately reflect their local economic conditions by analyzing economic structures based on regional brief input-output tables drawn at the municipal level. However, there are few cases that examine policies at the level of whole local blocks on the basis of comprehensive economic structural analyses for all municipalities in the area. With a focus on input-output tables for the five prefectures of the Chugoku District, we calculated production and expenditures at the level of livelihood zones, which are multiple municipalities in the district, and analyzed the balance of regional payments obtained. Based on this analysis, we examined the implications of policies for industrial promotion and regional formation in the district from the perspective of local economic independence and sustainability. A balance of regional payments can be obtained by subtracting local expenditures from local production. Our study revealed that in the Chugoku District, deficit-saddled areas (where local industries cannot generate adequate profits for the residents' livelihood) spread across small cities and mountainous areas. In the meantime, many of these areas contribute to a gain in income from outside the Chugoku District. Based on these findings, we conclude that it is significant for each sphere of life to work as a unit of sustainability and form broader economic zones through reciprocal efforts to boost economic independence in the whole district. To achieve this goal, it is important to highlight the concept of industrial promotion for the sustainability of local societies in small cities and mountainous areas, as well as implement measures for facilitating industrial promotion in central cities and production improvement in combination with the global economy. In addition, it is essential to formulate substantial plans for broader local areas.JEL classification: R11,R12,R15

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