Regional growth in postwar Japan

"onal ycE &urban ELSEVIER

Regional Science and Urban Economics 27 (1997) 643-670

ECONOMICS

Regional growth in postwar Japan Masahisa

Fujlta " " ' * , Takatoshi Tabuchi b

alnstitute of Economic Research, Kyoto University, Sakyo-ku, Kyoto 606-01, Japan bFaculty of Economics, University of Tokyo, Bunkyo-ku, Tokyo 113, Japan Received 25 July 1995; accepted 14 May 1996

Abstract

We show that a shift from light to heavy industries brought about the fast regional transformation from the Tokyo-Osaka bipolar system to the Pacific industrial belt system, and a shift from heavy to high-tech and service industries induced the second transformation to the Tokyo monopolar system. We also show that the recent development in telecommunications and transportation technologies tend to agglomerate knowledge-intensive activities in the core regions of Japan while dispersing mass-production activities to nonmetropolitan regions and overseas. This partly explains the recent renewed tendency of the increasing income differential between the core and peripheral regions.

Keywords: Japanese city system; Regional growth; Multinational firms JEL classification: R11 ; R12

1.

Introduction

After World War II (WWII), the Japanese economy experienced two periods of major structural change. First, when the war-shattered Japanese economy recovered to the prewar level in the mid 1950s, the Japanese economy started growing rapidly, a trend which continued until the early 1970s. During this period of rapid economic growth, Japanese manufacturing industries experienced a major shift from light to heavy industries, a change made possible by imported Corresponding author. Tel.: (81-75) 753-7122; fax: (81-75) 753-7198; e-mail: [email protected],jp 0166-0462/97/$17.00 © 1997 Elsevier Science B.V. All rights reserved PI1 S0166-0462(96)02167-9

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technologies and inexpensive oil and raw materials from abroad. On the Japanese landscape, this industrial shift was manifested as a transformation of the traditional Tokyo-Osaka bipolar regional system (inherited from the prewar period) to a new system centered around the Pacific industrial belt (extending from Tokyo to Kitakyushu). This high growth period for the Japanese economy then abruptly ended with the first 'oil shock' in 1973, which increased overnight the oil price in Japan almost threefold. In addition, the transition of the foreign currency exchange system from fixed rates to floating rates in 1970 induced a swift appreciation of Japanese yen (in terms of US dollars). The high oil prices and high Japanese yen during the 1970s not only made the growth rate of the Japanese economy slower but also forced Japanese industries to become more energy efficient and more competitive internationally. Thus, when the second 'oil shock' struck in 1979 and tripled the oil price again, the Japanese economy was prepared for the even higher oil prices and higher yen coming in the 1980s. This combination of high oil prices and higher valued yen together with intensified competition with newly industrialized economies (NIEs) in East Asia brought about the second major structural change of the Japanese economy which started in the mid-1970s and is still continuing today. During this time, the Japanese economy has been experiencing a major shift from heavy industries to high-tech and service industries (more generally, to knowledge-intensive activities), which is in turn bringing about another major transformation of the Japanese regional system from the previous Pacific industrial belt system to a new system dominated by Tokyo, i.e., the Tokyo

monopolar regional system. This paper aims to present an overview of the regional growth processes of postwar Japan, with a special focus on the two periods of major structural change for the Japanese economy described above. In Section 2, we review the major economic trends in postwar Japan. In Section 3, we begin by discussing how the first major shift of the Japanese economy from light to heavy industries brought about the formation of a new regional system centered around the Pacific industrial belt (from the mid-1950s to the early 1970s). Then, we examine how the second major shift of the Japanese economy from heavy to high-tech and service industries has been inducing the development of the Tokyo monopolar system (from the mid-1970s to the present). Next, in Section 4 we investigate the mechanism underlying this development of the Tokyo monopolar system. Our study indicates that for a full understanding of this mechanism, it is not sufficient to examine the Japanese economy simply in terms of the traditional industrial classification. One must also conduct more detailed analyses in combination with a city system approach and a corporate organizational approach in the context of the global economy. In particular, it is essential to understand the organizational and locational behavior of multinational firms (MNFs) which dominate the Japanese economy. To further illustrate this point, in Section 5 we focus on the nine largest electronics firms in Japan, and examine their global locational behavior and spatial reorganization over the past two decades. Finally, in Section 6, we present a summary of our study and future research directions.

M, Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

645

Table 1 Growth rate of real GNP in Japan Year

(%)

1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 Average

7.2 7.6 6.5 9.2 13.1 11.6 8.7 8.4 11.3 5.8 10.4 11.0 12.2 12.1 10.2 9.7

Year

(%)

Year

(%)

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

4.3 8.7 7.6 - 0.8 2.9 4.2 4.8 5.0 5.6 3.5

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

3.4 3.4 2.8 4.3 5.2 2.6 4.3 6.2 4.8 4.8 4.3 1.4 0.1

Average

4.6

Average

3.7

2. Industrial shifts in postwar Japan Let us begin with a general historical overview of Japanese economic growth. Table 1 describes the notable growth of Japanese economy after WWII. In particular, the period between 1956 and 1970 is characterized by a very high rate of economic growth (9.7% annual average growth of real GNP). After 1970, however, due to high oil prices and yen appreciation, the growth rate of real GNP dropped by about half (average annual growth rate of 4.6% for 1971-80, and 3.7% for 1981-93), which is nevertheless high. As a result, the Japanese share of the world GNP steadily increased from 3.2% in 1955 to 12.2% in 1985. Next, Fig. l depicts the significant growth in Japanese exports of manufactured goods after WWII which has propelled the rapid growth of the Japanese economy. We can see from Fig. 1 that Japan's share in world exports recovered its prewar level by the early 1960s, and then in the late 1980s it became about the same with those of the US and (West) Germany. [The latter fact provides the background for the intensifying trade frictions in the 1980s]. Here, we also note that the Japanese population increased from 83 million in 1950 to 123 million in 1990 (an annual average growth rate of 1.1% in the 1950s, 1% in the 1960s, 1.3% in the 1970s, and 0.5% in the 1980s). Fig. 2 shows the industrial shift measured by share of employment. While the employment share of the primary industry (mainly agriculture) dropped sharply after WWII, the shares of the secondary (mainly manufacturing) and the tertiary (mainly service) industries grew steadily over time. Around 1960, the latter two shares exceeded the former. After 1970, however, the manufacturing share

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M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

Pax

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Fig. 1. World export shares; source: Okumura (1987).

declined slightly, while the service share kept increasing steadily, exhibiting the trend of the so-called deindustrialization. Fig. 3 represents the changes in the composition of manufacturing industries in terms of value added. This figure reveals, first, that in 1955 (i.e., at the beginning of the rapid growth period), the Japanese manufacturing sector was dominated by light consumer industries (especially, textile mill and food). During the next 15 years of the rapid growth period, however, the share of light consumer industries such as textile mill and food diminished notably, while that of machinery and fabricated metal products industries almost doubled. Driven by the increase in input demand by these rapidly expanding machines and fabricated metal products industries, iron and steel and nonferrous metal industries also swiftly expanded their production. [Note that in Fig. 3, if an industry kept the same share from 1955

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Fig. 2. Industrial employment share.

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M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

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Fig. 3. Shares of value added by manufacturing industries; source: Census of Manufactures, 1955-90.

to 1970, its value added (in real terms) would increase about 10 times over the same period]. We can also see from Fig. 3 that over the same 15 year period, petroleum and chemical industries also rapidly increased their production, reflecting the so-called energy revolution (i.e., substitution of oil for coal and hydraulic power as energy sources) and growth of the plastic and synthetic fiber industries. Fig. 3 also indicates that in this period, electric and transport machinery industries were newly established. Thus, we can conclude that the rapid growth of the Japanese manufacturing sector during the 1956-1970 period was mainly lead by two lines of heavy industries, (i.e., steel and nonferrous metals-machines and fabricated metal products, and petrochemical-plastics and synthetic fibers) and by newly established electric and transport machinery industries. At the end of the rapid growth period, however, various types of pollution problems arose, and natural environments were damaged. Two oil shocks and the yen appreciation also contributed to the transformation of the industrial structure in the 1971-1980 period. As observed in Fig. 3, machine industries (including electric and electronics machines, industrial machines and automobiles) lead the

648

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

growth of the manufacturing sector in this period. That is, the Japanese manufacturing sector completed the transition from material-based heavy industries to advanced machine industries. In this period, another major industrial shift occurred in the tertiary sector where producer services (such as wholesale and financial services) started to expand rapidly while consumer services declined in share as seen in Fig. 4. Turning to the 1981-1990 period, Fig. 3 shows that the electric-electronics industry expanded dramatically in this period, which in effect suppressed the growth in shares of all other manufacturing industries. A closer examination reveals that its dramatic increase is due to a rapid expansion of electronics products (e.g., semiconductors, computers and communication and information electronics). In the tertiary sector, producer-service industries (notably, finance and business services) continued to grow rapidly (see Fig. 4). Therefore, the 19811990 period is characterized by an expansion of high-tech and producer-service industries. In other words, the leading activities of the Japanese economy have been moving from material-production to information-oriented or knowledgeintensive activities. Fig. 5 summarizes leading industries in each period. Major international economic events are also noted in the top of Fig. 5. In particular, through two oil shocks in 1973 and 1979, oil prices increased about eight times, which forced Japanese industries to become more energy efficient. In addition, the Japanese yen appreciated about 50% after the start of the floating exchange rate system in 1970 (Nixon shock); it appreciated further (about 100% more) after the G5 Plaza Accord of 1985. Forced by high oil prices and the appreciating yen, together with intensifying competition in the global export markets (due partly to the rapid growth of Asian NIEs and partly to intensifying trade frictions with the US and EC countries), the Japanese economy restructured itself towards high-tech industries through the 1970s and 1980s. In addition, liberalization of financial and capital

1-

B.9e

0.80.70.60,5

0.4 0.3 0.2 B.1 0

7~

7~

n's

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Fig. 4. Shares of value added by service industry; source: Economic Planning Agency (1988).

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

the end of Korean War

I~ i 1955

05 Plaza

Nixon shock

(19~a)

Accord

(19~0)

rapid growth

TM

heavy industries

649

[the first oil the second oil 1985) ~°ck i1973) shqck (1979) > mode~atell growth 1970

steel and machines oil and petrochemical

1980

advanced machines

electronics information cou~ications semicon~ctors

producer services

producer services

electric electronics industrial automobile ~olesales finance

~90

finance business services

Fig. 5. Leading industries in each period and major international economic events.

markets through the floating exchange rate system and the Plaza Accord made financial industries grow rapidly worldwide. This growth in high-tech and financial industries also caused a rapid expansion of producer-service industries in Japan through the 1970s and 1980s.

3. Regional transformation It has been commonly observed in economic history that the growth process of a successful large system (e.g., an industry, a region or a nation) is, typically, cyclical over time and uneven internally. That is, given major changes in environments, more advantageously endowed (or innovative) members of the system grow rapidly, while their growth impacts spread gradually to the remaining members, and the system eventually moves towards a new equilibrium. If major changes in environments occur again, the system will repeat a similar process. Thus, its long-run growth process is cyclical over time and uneven internally. Alonso (1980) described this process in terms of bell-shaped curves depicting the growth rates of various elements of the system. As explained in Section 2, the Japanese economy experienced major structural changes twice after WWII. Reflecting these structural changes, the Japanese regional system also experienced major transformations twice. To explain this, it is best to start with Figs. 6 and 7. Fig. 6 depicts the net migration to the three largest metropolitan areas (MAs): Tokyo, Osaka and Nagoya. These MAs experienced a high rate of net migration until 1970 with the peak early in the 1960s, followed by a sharp drop. This overall pattern is synchronized among the three MAs for most of the period, but began to vary in recent years. While the Osaka and Nagoya MAs underwent net out-migration after 1970, the Tokyo MA never lost its population at

650

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

(thousand)

6001 700

I

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+"1/x/

MAs

.........

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.............. \

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65

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7~

. . . .

,

. . . .

75

,

80

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,,, 85

Fig. 6. Net migration to the three largest metropolitan areas (Tokyo MA: Tokyo, Kanagawa, Saitama and Chiba prefectures; Osaka MA: Osaka, Hyogo, Kyoto and Nara prefectures; Nagoya MA: Aichi, Gifu and Mie prefectures).

any time through interregional migration. In consequence, the largest metropolitan area of Tokyo became preeminent in size during the 1980s. It should be noted that large cities in most of the developed countries experienced a trend similar to that of Osaka and Nagoya, a simultaneous population dispersal: net migration to large cities had been consistently great until 1970, but became insignificant after that (Vining et al., 1981). The Osaka and Nagoya M A s exhibited such a typical migration pattern. On the other hand, although the number of net migrants to the Tokyo M A decreased after 1970, it has never been negative and has even been gradually increasing since 1975. Compared with other large cities in developed countries, Tokyo seems to be one of the exceptional cities especially in the period after 1975. Let us next examine the interregional income differential in the same period. 0.03 0.11250.020.

015

-

O010. 005 0

55

within

non-N/ks

. ,'-

/ 60

65

70

..........................

75

8B

.....

85

Fig. 7. Theil's measure of the interregional per capita income differential; source: Economic Planning Agency (1991).

M. Fujita, T. Tabuchi I Regional Science and Urban Economics 27 (1997) 643-670

651

Fig. 7 shows the interregional income differential estimated by Theil's measure of the per capita income differential across prefectures for 1955-88. I Theil's measure is decomposed into three components: within nonmetropolitan areas, within MAs and between nonmetropolitan areas and MAs. We observe from Fig. 7 that while the within MAs component is relatively small and constant over time, the other two components are not. They are large until 1970 implying that the great interregional income differential during the period may be attributed to the nationwide transformation of the interregional economy, in particular to changes between rural and urban regions and among rural regions. Comparing Fig. 7 with Fig. 6, we find a clear synchronization between the interregional migration and the interregional income differential. For the period 1955-75, we recognize the bell-shaped curves in these figures: increasing in the first stage, then decreasing in the second stage. Not surprisingly, there is a causality between the two. Using Sim's test of causality, Tabuchi (1987) demonstrated that interregional migration is a consequence of the income differential, but the reverse is not true in postwar Japan. That is, the rural/urban income differential statistically preceded the rural/urban migration by a few years. During the first stage of development, the speed of economic development varies across cities. It is often observed that the larger cities experience higher rates of economic growth, and so the interregional income differential tends to increase over time. This is generally observed in current developing countries, and is exemplified by the Tokyo-Osaka bipolar growth pattern in Japan. In the second stage, as the regional factor markets are gradually integrated by interregional movements of factors and products, the differential has been naturally reduced, which would be related to the formation of the Pacific industrial belt in Japan. Most of the literature on interregional growth theory (Williamson, 1965; Alonso, 1980) deals with these first two stages, but does not go beyond. In the third stage (i.e., after 1975),z however, we observe a moderate but constantly increasing trend in the interregional income differential. In accordance with the economic integration, there must exist a market force which lessens the interregional differential as in the second stage. In other words, according to the neoclassical regional economic theory, interregional factor movements (labor force migration to the metropolitan areas and capital investment in nonmetropolitan areas) should lead to a decrease in the interregional income disparity. Theil's (unweighted) measure is defined by Yi T = 2., ,,

''Ey~ 3--1

my, log

Eyj )-I

where m is the number of prefectures and y~ is the per capita income in region i. It should be noted that other indexes, such as the coefficient of variation for the per capita income differential (whether weighted by population shares or unweighted), exhibit similar tendencies, and are hence omitted in this paper. z Notice that the division into the three stages here differs from that into the three periods in Fig. 5.

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M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

Nevertheless, we observe that it has a tendency to grow steadily in the third stage.3 How can we explain the steady growth in the third stage? We infer that structural changes in the Japanese economy took place after the second stage. In the first and second stages, the bell-shaped curve corresponds to the development processes of the Japanese economy based on heavy manufacturing and petrochemical industries. Due to the structural change in Japanese economy, however, the leading sector of Japan has altered to the high-tech and service industries, resulting in different paths of regional development. The notion of agglomeration economies has extended too. They comprise not only scale, localization and urbanization economies, but also 'economies of interregional networks' in railway, road, airplane, telephone, television, mail, newspapers and computer communications. These increasing economies have significantly transformed the internal structure of multilocational firms and the Tokyo monopolar network system, as will be argued in detail in Section 4. Before doing this, we would like to describe the industrial transformation of postwar Japanese regional economy more carefully. 3.1. Formation of the Pacific industrial belt Fig. 8 describes the postwar manufacturing growth and decline of the Pacific industrial belt, which consists of the four cores and their surrounding regions. Although Osaka was the largest industrial core (measured by highest output share) with agglomeration of many manufacturing firms, Tokyo overtook it in 1953, 40 S u r r o u n d i n g

A r e a s

35 I

i

~ 2o 15

"''''°..=

10 5 0

Nagoya Core " - - ~ - ~ - - -

'

50

'

'

'

'

'

55

- ~

'

'

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....

-~" . . . . . K i t a k y u s h u

'

60

'

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65

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. . . .

70

'

'

'

. . . .

75

'

C o r e

. . . . .

80

i

J

85

J

i

,

90

Fig. 8. Shares of the total manufacturingoutput (Tokyo Core: Tokyo and Kanagawa prefectures; Osaka Core: Osaka and Hyogo prefectures; Nagoya Core: Aichi prefecture; Kitakyushu Core: Fukuoka prefecture; Surrounding Areas: 17 prefectures surrounding the four cores). 3 It must be noted that this phenomenon is not an isolated event for Japan only. For example, in the United States, the income differential between core regions and non-core regions increased during 1980s (Ray and Rittenoure, 1987). The international nature of this trend seems to be a major indication of the structural change in the world economy.

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

653

leading to the establishment of the T o k y o - O s a k a bipolar system. After that, the bipolar system gradually declined off in relative terms while the regions surrounding the cores grew steadily, and the Pacific industrial belt emerged as the Pacific megalopolis. These trends are in accordance with those of the net migration and income differential in Figs. 6 and 7. During the period 1955-1970, Japanese economic growth was led by the heavy manufacturing and petrochemical industries. While the light industries such as printing, publishing and apparel have concentrated mostly in the large MAs, the location of the heavy manufacturing and petrochemical industrial complexes shifted from the core regions to their surrounding regions in the second stage, thus forming the Pacific industrial belt. They moved out of the core regions due to the land constraint, and located in the coastal regions where raw materials can be imported from overseas, which follows the conventional Weberian"theory of industrial location. It should be remembered that several national comprehensive development plans played a role in facilitating the relocation of industrial complexes, although their true economic impacts are uncertain and are difficult to measure statistically. Remember also that the government policies usually follow, rather than precede, the actual transformations in the structure of manufacturing industries, so we do not enter into the details here. In that period, the steel and the petroleum products were leading industries. In these industries, oligopolistic firms established new branch plants in the surrounding regions of the four MA-Cores in addition to their home plants (Yada and Imamura, 1991, p. 3), contributing to the formation of the Pacific industrial belt. Theoretically, this may be viewed as strategic behavior on the part of the multilocational firms under oligopoly, a theme which often appears in the field of international economics (e.g., Brander and Krugman, 1983)• Other leading industries were electric and general machinery and automobiles. Tokyo represented the major 'growth pole', where a variety of subcontracting firms and diverse engineers agglomerated in a limited space. With the growth of the machinery industry through overseas exports, this growth pole region has been expanding and involving its surrounding regions especially in the early period• In the same way, the automobile and shipbuilding industries concentrated in Nagoya Core, and the shipbuilding and electric industries in Osaka Core. The growth of these industries in the Cores strengthened their own economic status as well as that of the surrounding regions which include factory towns dependent on coal mining, shipbuilding and fabricated metals industries. •

•

4

4 Government interregional transfer payments are achieved through governmentexpenditure, mainly on infrastructure investments, from Tokyo to the rest of the nation. However, such an indirect transfer is partially cancelled by the intra-corporation direct income transfer, which is due to the division of management and production. According to Chiba et ai. (1988) (Table 3.6), 2.1 trillion yen were transferred to the Tokyo prefecture from the rest of the nation in 1975, and 5.2 trillion yen in 1983. The net welfare effect of the two transfers is then uncertain.

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M. Fujita, 7". Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

Such an industrial-complex type of growth in the Pacific industrial belt certainly enlarged the interregional income differential by way of the interindustrial wage differential, and consequently induced migration from rural regions to the Pacific industrial belt in the first stage of development. This was followed by the diminishing interregional income differential and migration in the second stage due to the interregional adjustments of factor markets. In the electric and electronics industry, for instance, research and development (R&D) laboratories and knowledge-intensive plants were located in the Cores or in their suburbs whereas many simple production plants were built all over Japan. Although the wage rates of the latter plants were normally low, especially in the peripheries, they are yet high enough for workers formerly engaged in agriculture and fishery there. Therefore, by absorbing the surplus labor force in nonmetropolitan areas, the interregional income differential has been diminishing, and the rural/urban migration also has been decreasing in the course of time.

3.2. Development of the Tokyo monopolar regional system The establishment of production plants, however, was not sufficient to secure the long-run growth in the nonmetropolitan economy. Since the production plants employed mainly unskilled labor with a low wage rate in the nonmetropolitan areas, the interregional income differential did not diminish completely. On the contrary, it began to increase at the end of 1970s as seen in Fig. 7. In parallel to this trend, Tokyo started to absorb population through interregional migration as observed in Fig. 6. Not only population, but also HQs of major firms have been concentrating in Tokyo. Table 2 shows the distributions of HQs and branch firms in large Japanese cities in 1985. We observe a strong agglomeration of HQs in Tokyo, which suggests that the recent spatial integration of Japanese multilocational firms enables the sectors with central management functions to enjoy the urban agglomeration economies in Tokyo. Such industrial and population concentration to the Tokyo MA led to the establishment of the Tokyo monopolar system. In Table 2, we witness the reorganization of urban hierarchy from the bipolar system to the monopolar system. The recent period of the development of the Tokyo monopolar system (197590) is quite different from the previous period of the formation of the Pacific industrial belt (1955-75). The classical regional growth theory ~ la Williamson applies only in the previous period, when heavy manufacturing and petrochemical industries were leading industries. In the recent period, however, high-tech and service industries replaced them under the rapid technological changes. Regional growth and decline are sensitive to such a structural change in the nationwide economy. Since the nationwide economic transformation over a long period cannot be explained by a single economic theory, the same would be true for the regional transformation. That is, we have to provide a different explanation for the

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

655

Table 2 Distribution of population, headquarters and branch firms in 1985; from Abe (1991)

Tokyo Osaka Nagoya Yokohama Kyoto Kobe Sapporo Sendai Hiroshima Fukuoka Kitakyushu Chiba Niigata Shizuoka Kanazawa Okayarna Takamatsu

Population (10 thousands)

HQs

Branches

835 264 212 299 148 141 154 86 104 116 106 79 48 47 43 57 33

823 256 71 35 39 44 17 7 18 19 13 5 7 6 10 1 5

1165 1115 1034 397 251 3l7 738 727 718 846 255 276 347 320 280 275 374

formation of the Tokyo monopolar system. Section 4 below will be devoted to this. Before moving to Section 4, let us take a close look at evidence of the concentration tendency of leading economic activities to Tokyo by several statistical data. Fig. 9 displays the share of each agglomeration index in the Tokyo MA in recent years, where the numbers on the right side of the bar chart represent the corresponding years. Compared to the population share used as a benchmark, we immediately observe Tokyo's extraordinary shares of financial activities. Moreover, these shares are growing in recent years. Number of firms, number of university students, and most other indicators are also large in the Tokyo MA relative to the population share. Roughly speaking, Tokyo is attracting financial activities by a three to one margin over population, and the concentrating trend is continuing and even accelerating. Thus, in contrast to the deindustrialization phenomenon in several developed countries, Tokyo is characterized by the agglomerations of various central management functions, a finding which will be discussed further in the next section with Fig. 11. A survey of 322 major firms (including 147 foreign firms) located in Tokyo took place in 1988, and revealed firms' reasons to locate their HQs in the Tokyo MA (Economic Planning Agency, 1990). The leading reason for domestic firms was to collect business information on markets and customers, and the second was to collect business information on other firms and industries. For foreign firms, the first reason was the same as above while the second was the convenience of financial transactions. These results indicate the importance of information and transaction factors in the location decision of HQs, which is in accord with the

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M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643 670

~46 number of foreign-based firms

l

i[

8917 value of commercial papers exchanged

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99~ number of HQs of the firms capitalized at ten billion yen or m o r e ~ loan balance ofnmin banks 8s39 number of listed firms ~0 number of college students ~

total commercial sales

~27 net savings at banks 8916 finance and insurance employment

i------

~

service employment

98~ office employment

il

99~ manufacturing output ~

population

9sl 6 number ofeslablishrnents

~ I00

i

i

80

60

40

area

20

%

Fig. 9. Agglomeration indexes of Tokyo MA; source: Economic Planning Agency (1990).

modem economic theories of urban agglomeration. However, these results contradict standard models of urbanization in which urbanization takes the form of the creation of new cities that converge to an optimal size.

4. Mechanism underlying the development of the Tokyo monopolar regional system Fig. 10 summarizes the background for the development of the Tokyo monopolar system. Starting in the early 1970s, the entire world is undergoing a profound restructuring processes of economic, social and political systems. The key factors are the d4tente in East-West relations, the new prevalence of democracy and market economies, and technological development in production, communications and transportation. Resulting productivity increases and open trade policies together with liberalization of financial and capital markets have promoted phenomenal growth in the international movement of goods, services,

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

657

A. Macro environments of the world economy A-1. globalization of the world economy (goods, services, capital, people/labor, information) A-2. " intensification of competition A-3.

technological development (electronics, computer, communications, transportation)

B. Ma~or structural changes in the Japanese economy B-1. shift of leading sectors from heavy industries to high-tech and service industries B-2. global expansion of MNFs (manufacturing, services, finances) B-3. shift ofleading economic activities from material production to knowledge-intensive/information--oriented activities

C. Development of the Tokyo-monopolar regional system C-1. Tokyo as a world city C-2.

new Japanese urban-hierarchy based on management functions

C-3. global relocation of production operations and R&D activities by MNFs Fig. 10. B a c k g r o u n d for the development of the T o k y o - m o n o p o t a r regional system.

capital, people/labor and information. This globalization of the world economy (Part A-1 in Fig. 10) has been accompanied by intensifying competition among the US, Japan, EC countries and the NIEs of East Asia (part A-2 in Fig. 10). Furthermore, the recent rapid development of information technologies (i.e., computer and telecommunication technologies) together with the successive improvements of air and other transportation networks are transforming the traditional industrial economy into a knowledge-based economy or information economy (Part A-3 in Fig. 10). These profound changes in the macro environments of the world economy have brought about several major structural changes in the Japanese economy. First, given intensifying competition in global markets together with the high valued yen, the high energy costs and high wage rates, the Japanese economy has been shifting from heavy industries to high-tech industries under the rapid technical progress. In addition, liberalization of financial and capital markets and rapidly expanding global operations of MNFs have made financial industries (in particular, international finances) grow notably in Japan. As stated before, this growth in high-tech industries and financial services also caused a large expansion of producer services in Japan as well (Part B-1 in Fig. 10). Second, given the high valued yen and the high wage rate in Japan during the past three decades, many big manufacturing firms moved a significant part of their labor-intensive production operations to the low-wage countries (in particular, those in East Asia). The intensifying trade frictions with the US and EC countries

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M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

also induced many Japanese manufacturing firms to establish their new production plants in these countries. In addition, taking advantage of the financial liberalization, most large Japanese financial firms established their branch offices in major world financial centers (such as New York, London and Hong Kong). Today, the Japanese economy is dominated by the big MNFs (Part B-2 in Fig. 10). Note that this rapid growth of MNFs was technologically feasible only with the recent development of information technologies and transportation networks mentioned above. Third, the intensifying competition in the global markets together with the successive expansion of the scientific knowledge base of society made innovations (for both processes and products) a key strategy for survival and growth of these MNFs. This induced these firms to allocate an increasing portion of their financial and human resources to R&D activities, while moving their labor-intensive operations to low-wage countries. In addition, global expansion of their operations required these MNFs to strengthen the management functions at their headquarters (HQs) located in Japan. This growth of R&D activities and HQs also induced a notable growth of advanced business services, such as advertisement, information acquisition and hiring. In this way, during the past two decades, the Japanese economy has been shifting not only from heavy industries to high-tech and service industries (Part B-1 in Fig. 10), but also from material-production to knowledgeintensive activities (Part B-3 in Fig. 10). [Note that Part B-1 and Part B-3 in Fig. 10 are not the same. For example, production of integrated circuits belongs to a typical high-tech industry. However, while its front processes (i.e., design and mask fabrication to wafer probing) belong to knowledge-intensive activities, its back processes (i.e., dicing to testing) belong to labor-intensive activities. Thus, the latter processes can be moved to low-wage countries[. As mentioned earlier, these structural changes of the Japanese economy have enabled the development of a new Japanese regional system dominated by Tokyo, i.e., the Tokyo monopolar system. Together with liberalization of financial and capital markets, Tokyo then established its status as a major world city (Part C-1 in Fig. 10). Unlike the previous Pacific industrial belt system (which was mainly based on manufacturing industries), this new regional system is formed centering around a new urban hierarchical system based on management functions and other knowledge-intensive activities (Part C-2 in Fig. 10). Situated at the top of this urban hierarchy, as a major world city, Tokyo dominates all other Japanese cities by agglomerating (within its MA) most high-ranking management functions and other knowledge-intensive activities of the Japanese economy, while production plants and R&D laboratories of MNFs were relocated (Part C-3 in Fig. 10). Fig. 11 depicts conceptually the internal structure of the Tokyo metropolitan complex. Its central core (shaded in Fig. 11) consists of a huge agglomeration of central management functions (or 'chusu kanri kino') of the Japanese economy and government, which include essentially all of central offices of the national government, head offices of major political parties, HQs of most major Japanese

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

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Fig. 11. Tokyo metropolitan complex.

c o m p a n i e s a n d f o r e i g n c o m p a n i e s ( l o c a t e d in Japan), 5 h e a d offices o f m a j o r b a n k s a n d o t h e r financial f i n n s ( i n c l u d i n g t h o s e o f f o r e i g n agents), a n d m a j o r i n d u s t r i a l o r g a n i z a t i o n s or c l u b s (such as t h e F e d e r a t i o n o f the J a p a n e s e E c o n o m y a n d the F e d e r a t i o n o f the A u t o m o b i l e I n d u s t r y ) . 6 T h e b a s i c a g g l o m e r a t i o n force o f t h e s e c e n t r a l m a n a g e m e n t f u n c t i o n s is the c o n v e n i e n c e o f f a c e - t o - f a c e c o m m u n i c a t i o n s 5 Most Japanese major companies whose HQs are located outside the Tokyo MA also have their head branch offices in Tokyo. 6 Note that in a country like Japan where the establishment of human relations is a precondition for conducting effective communication, the recent development of telecommunications technologies and air and high-speed transportation networks does not diminish, but even more enhances the necessity and value of face-to-face communications. The following, excerpted from the (May 4, pp. 15-16), illustrates the importance of face-to-face communications (for operating financial offices) in the age of advanced communication technology: "The other centralizing force is, paradoxically, the computer itself. By and large, the computer is a leveller. By making information available to everyone, it makes it all the more important to get closer to the source of that information. Put another way, it makes lunch even more important. Moneymen closer together get a step ahead of the computer. That is why, if they have their way, they will stay in clusters."

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M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

among them. Thus, they all locate together in a relatively very small area of Tokyo (i.e., the core area of the CBD covering the three wards: Chiyoda-ku, Chuo-ku and Minato-ku). The central government offices have been playing the role of catalysts for the formation of this agglomeration. Surrounding this core agglomeration of central management functions, knowledge-intensive activities such as R&D laboratories, universities and advanced business services locate in the CBD or the suburbs of Tokyo (see Fig. 11). These knowledge-intensive or information-oriented activities locate relatively close due partly to the convenience of face-to-face communications and more generally to enjoy the agglomeration economies which are generated by the accumulated as well as newly created knowledge and information in the Tokyo MA. Given that major domestic and international transportation and communications networks of Japan are primarily based in Tokyo, the strategic value of Tokyo as the center of knowledge-based or information-based activities is enhanced even more. Furthermore, as illustrated in Fig. 11, the agglomeration of corporate HQs, R&D laboratories, universities and advanced producer services in Tokyo also attracts advanced manufacturing activities (such as design of new products, trial production plants for new products, production of high-skilled goods like computers), and information-oriented industries like data processing, fashion, publications and entertainment. Such industries are possible only in very large cities like Tokyo because of the scale and scope of the economies. Finally, the huge market of the Tokyo MA (having about 30 million residents) itself contributes to a further agglomeration of consumer-oriented industries. Next, in order to see the relationship between the Tokyo MA and the rest of Japan, it is helpful to examine the spatial organization of large Japanese firms (which together dominate the Japanese economy). Fig. 12 illustrates the spatial organization of a typical large Japanese manufacturing firm, which is closely related to the Japanese urban system.8 As we have seen in Table 2, HQs of most large firms locate either in Tokyo or Osaka. In particular, HQs of most large MNFs and those of most large foreign firms (in Japan) locate in Tokyo. If a large firm has its HQs in Tokyo, then its head branch-offices (for sales and information acquisition) usually locate in Osaka (the center of the Osaka MA) as well as in five other regional centers, i.e., Nagoya, Sapporo, Sendai, Hiroshima and Fukuoka. 9 In •

7

7 Due to the liberalization of financial and capital markets following the Plaza Accord in 1985, the establishment of new international financial offices is especially notable in Tokyo. 8 All large Japanese finns are not multinational. However, almost all large Japanese firms are multilocational. Thus, by appropriately interpreting it, Fig. 12 can be considered to represent the spatial organization of typical large Japanese finns. Note also in the case of service finns, they do not have production plants and R&D laboratories. 9 That a finn has its HQs in Osaka implies almost always that it is an Osaka-based company. The same is not necessarily true for finns having their HQs in Tokyo. As noted before, if large Osaka-based finns have their HQs in Osaka, then they usually put their main head offices in Tokyo and conduct a significant part of the central management function from them.

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

661

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fact, this spatial system of head branch-offices (of large firms) mostly coincides with that of national government agents. Furthermore, in Osaka and in each of the five regional centers above, a significant agglomeration of local management functions and knowledge-intensive activities (such as HQs of local firms, industrial clubs, local universities and producer services) has been created. Thus, each of the five regional centers above plays the role of a 'mini-Tokyo' in that region (Yada and Imamura, 1991). [Note that Osaka city is more than a mini-Tokyo; its central functions extend to the surrounding regions. Thus, if Tokyo is the first-ranking city and the five regional centers above are the second-ranking cities, then Osaka is the 1.5th-ranking city.] Next, centering around each regional center above, there exist several provincial cities (i.e., third-ranking cities) in which local branch-offices of large firms and national government agents locate together with provincial colleges and service firms. In this way, the urban system of Japan today is organized around the central management functions of large firms and national government agents, exhibiting a Christaller type (i.e., tree-shaped) hierarchy. The spatial system of production and R&D operations of large firms, however, does not necessarily coincide with that of the urban hierarchy system above. While most trial-production plants and R&D laboratories of those firms that have their HQs in the Tokyo MA are located in the suburbs of the Tokyo MA, their mass-production plants are scattered throughout Japan (new ones are mostly in

662

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

provincial cities) and increasingly are overseas.1° [Again, in the case of Osakabased firms, they tend to locate their trial-production plants and R&D laboratories both in the Osaka MA and the Tokyo MA]. These mass-production plants are usually specialized in a few products, and are directly controlled either by their HQs or by central plants which are mostly located along the Pacific industrial belt. Moreover, parts and semifinished products are often exchanged between main plants and local plants, while finished products are sold throughout Japan and overseas. Therefore, the spatial system of production plants and R&D laboratories resembles the weak-hierarchical system of Pred (1977). In this manner, the change in the industrial structure exerted a substantial influence on the landscape of the Japanese urban hierarchy system. It is interesting to note that the separation of the urban hierarchy system (based on central management functions and marketing) and the spatial system of production operations emerged from the dual nature of recent developments in communications technologies and transportation networks. That is, the recent development of computer integrated manufacturing (CIM) methods enables the complex production technologies to be embodied in capital, and thus reduces the skill-requirements of workers in standard production operations. In addition, the development of telecommunications technologies is vastly improving the speed, reliability and capacity of communications; furthermore, the costs of such communications are less sensitive to distance. Therefore, by effectively combining CIM methods and modem telecommunications technologies, large firms (which have a sufficient capital and accumulation of know-how together with R&D capability) can rather freely choose the location of their mass-production plants. Thus, the location of mass-production plants follows the basic local (non-agglomeration) factors such as availability of disciplined workers, basic infrastructure, low wage rates and low land prices. Therefore, new mass-production plants do not follow the urban hierarchy, but tend to disperse themselves to nonmetropolitan areas in Japan and even overseas. On the other hand, the urban hierarchy system has been created by the agglomeration forces based mainly on face-to-face communications, which favor tight agglomeration of central management functions at key nodes. In particular, given recent development of communication technologies and high-speed transport networks, these communication nodes are being consolidated and reorganized centering around a smaller number of key cities. Situated at the top node of both the urban hierarchy system and the spatial system of production operations, Tokyo enjoys an unparalleled position in the Japanese regional system today. Furthermore, as noted in Section 3, HQs of most MNFs and foreign firms in Japan, as well as head offices of international financial firms, locate in Tokyo. 1~ Therefore, in an age of the borderless economy, as a to In Section 5, we elaborate this point further by studying the electronics industry. ~ See Sassen (1991) (Chapters 6 and 7) on the concentration of HQs in London and New York.

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

665

Next, we examine the recent trends in location behavior by the nine firms. Figs. 14 and 15 show the location of their new production plants and R&D facilities respectively form 1976 to 1985, and from 1986 to 1990. We can see from Fig. 14 that between 1975 to 1985, the nine firms built 60 new domestic plants (16 in

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M. Fujita, T. Tabuchi I Regional Science and Urban Economics 27 (1997) 643-670

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metropolitan areas and 44 in nonmetropolitan areas) and 90 overseas plants. During the same period, they built 24 domestic R&D laboratories (21 in the Tokyo and Osaka MAs and 3 in nonmetropolitan regions) and 6 overseas laboratories. We

M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

667

can see from Fig. 15 that during the next five years from 1986 to 1990, the nine firms built only 20 new domestic plants (5 in metropolitan areas and 15 in the surrounding areas), while they built 107 overseas plants. During the same five years, they built 24 new domestic laboratories (20 in metropolitan areas and 4 in the surrounding areas) and 19 overseas laboratories. Thus, concerning the location behavior of the nine Japanese electronics firms, we can conclude as follows. First, during the last 15 years, they increased their new production plants more rapidly in overseas countries than in Japan. Furthermore, the growth in the number of overseas production plants has been accelerating recently, while that in Japan has become much slower. Second, most of their plants in overseas countries are of the mass-production type, while new plants in Japan include both trial-production plants and mass-production plants. As the number of their mass-production plants increases overseas, Japanese plants tend to specialize in trial production. Third, while the number of their new production plants is increasing only slightly in Japan, that of new R&D facilities is rapidly increasing. Fourth, in terms of geographical location of their new plants and R&D facilities in Japan, more than half of the new plants are located in nonmetropolitan regions, while most new R&D facilities are in the Tokyo and Osaka MAs. Finally, we can also show that although the total employment of the nine firms in the MAs of Japan is rather stable, its composition has been changing significantly towards an increasing share of white-collar workers, scientists and engineers. 13 Although this section focused on one industry only, these results support our earlier statement that Japanese MNFs keep intensifying their knowledge-intensive activities (including HQs and R&D activities and trial-production) in the core regions of Japan, while they recently tend to build most of their new massproduction plants overseas, thus skipping the peripheral regions of Japan. As mentioned before, this will partly explain the recent renewed trend in the increasing income differential between the core regions and peripheral regions of Japan.

6. Conclusion

In this paper, we presented an overview of the regional growth processes of postwar Japan, with a special focus on the two periods of major structural change in the Japanese economy. We have shown, first, that during the period of rapid economic growth (between the mid-1950s to the early 1970s), Japanese manufacturing industries experienced a major shift from light to heavy industries, which brought about a transformation of the traditional Tokyo-Osaka bipolar system to

~3For this point, see Fujita and Ishii (1991).

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M. Fujita, T. Tabuchi I Regional Science and Urban Economics 27 (1997) 643-670

the Pacific industrial belt system (extended from the Tokyo MA to the Kitakyushu MA). Next, we have examined how the second major structural change of the Japanese economy from heavy industries to high-tech and service industries (from the mid-1970s to the present) has been inducing another major transformation of the Japanese regional system from the Pacific industrial belt system to the Tokyo monopolar system. We have concluded that unlike the previous Pacific industrial system (which was mainly based on manufacturing industries), this Tokyo monopolar system is being formed centering around a new urban hierarchical system based on management functions and other knowledge-intensive activities. We have also concluded that the recent development of telecommunications technologies and high-speed transportation systems tend to agglomerate knowledge-intensive activities (such as central management functions, advanced producer services, R&D activities and trial-production) in the core regions of Japan, while it tends to disperse mass-production activities to nonmetropolitan regions in Japan and overseas. Situated at the top node of both the Japanese urban hierarchy system and the global production system of Japanese MNFs, as a major world city, Tokyo dominates all other Japanese cities by agglomerating (within its metropolitan area) most high-ranking management functions and other knowledgeintensive activities. Finally, by examining the nine major MNFs of the Japanese electronics industry, we have shown that they keep intensifying their knowledgeintensive activities in the core regions of Japan, while they recently tend to build most of their new mass-production plants in overseas by skipping peripheral regions of Japan. This partly explains the recent renewed tendency of the increasing income differential between the core regions and peripheral regions of Japan. Our study also indicates that in order to fully understand the recent major transformation of the regional/urban system, which is being experienced both in many developed and developing countries throughout the world, we need to conduct a detailed activity-based analysis (in contrast to traditional industrialsector-based analysis) in combination with a city system approach and a corporate organizational approach in the context of the global economy. Although in this paper we have focused on Japan only, in the future we hope to conduct a more comprehensive study of regional transformation in comparison with several closely related countries (including both developed and developing countries) using a similar approach.

Acknowledgments The authors are grateful to an anonymous referee, Takahiro Miyao and Jacques Thisse for valuable comments.

M. Fujita, 7". Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

663

major world city, Tokyo's dominance in Japan is destined to increase unless some drastic political actions (such as a change to a federal system) is taken.

5. Spatial organization of multinational firms and Japanese regional system In order to illustrate some points noted above, in this section we consider the nine largest electronics finns in Japan, and examine the relationship between their 12 location behavior and the Japanese regional system over the past 15 years. [Throughout this section, the term 'electronics' should be understood broadly to include both electric and electronics products.] The firms considered are Hitachi, Matsushita Electric, Toshiba, NEC, Mitsubishi Electric, Fujitsu, Sony, Sanyo Electric and Sharp, of which total sales in 1990 were almost 200 billion dollars. We know from Fig. 3 that the electronics industry is the largest and most rapidly growing, and hence the most important manufacturing industry in Japan. It is dominated by the nine MNFs above. [Our discussion below includes the activities of the subsidiaries of these nine firms]. Each of the nine firms has already developed a very advanced global network for its integrated operation of management, production, R&D, procurement, distribution and sales worldwide. Fig. 12 depicts the typical spatial organization of these firms. As noted before, this corporate spatial organization structure is closely related to the Japanese urban/regional system. Fig. 13 summarizes the locational tendencies of organizational units (i.e., HQs, basic R&D laboratories, development R&D laboratories, trial-production plants, mass-production plants, overseas regional HQs, overseas R&D laboratories and overseas plants) of the nine firms in 1991. As can be seen from the figure, each unit has a different locational tendency. As shown in the top box in Fig. 13, all HQs are located in the two primary MAs in Japan (i.e., 6 in the Tokyo MA and 3 in the Osaka MA), and are mostly in the CBDs. The figure also indicates that 98% of their basic R&D laboratories (R&D controlled by HQs) are located in the suburbs of the two MAs, while 73% of development R&D laboratories are located in the suburbs of the two MAs and 24% of them in nonmetropolitan areas (mostly together with main production plants). The middle two boxes in Fig. 13 indicate that trial-production plants, which are closely related to their HQs and R&D laboratories in terms of information exchange, are mostly located in the two MAs (25% of them in the CBDs and 69% in their suburbs). In contrast, domestic mass-production plants are much more dispersed: 42% of them are located in the suburbs of the two MAs, while 56% in nonmetropolitan areas of Japan, and only one mass-production plant is in the Tokyo CBD. ~2Our discussion in this section is based on Fujita and Ishii (1991). We intend to write an article, in the near future, which elaborates further details of the discussion in this section.

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M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 ('1997) 643-670

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As indicated in the bottom three boxes of Fig. 13, overseas regional HQs are located either in North America (7 in the US), EC ( 1 in the UK and 1 in Germany) or East Asia (2 in Singapore). Sixty-one percent of overseas R&D laboratories are located in the US, while 29% of them are in EC and 11% ate in East Asia. Finally, overseas production plants are dispersed throughout the world: the share of each global region (i.e., North America, EC, NIEs, ASEAN together with China and India, and the rest of the world) is between 10% and 25%.

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Appendix 1

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References Abe, Kazutoshi, 1991, Research on Japanese urban system (Chijin Shobo, Tokyo) in Japanese. Alonso, William, 1980, Five bell shapes in development, Papers of the Regional Science Association 45, 5-16. Brander, James and Paul Krugman, 1983, A 'reciprocal dumping' model of international trade, Journal of International Economics 15, 313-21.

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M. Fujita, T. Tabuchi / Regional Science and Urban Economics 27 (1997) 643-670

Census of Manufactures, 1955-90, Ministry of Interational Trade and Industry, in Japanese. Chiba Tatsuya et al., 1988, Regional structure of income and finance (Taimeido, Tokyo) in Japanese. Economic Planning Agency, 1988, Report on regional economy in 1988, in Japanese. Economic Planning Agency, 1990, Transformation of Tokyo as the World City and regional revitalization, Report, in Japanese. Economic Planning Agency, 1991, Report on regional economy in 1991, in Japanese. Fujita, Masahisa and Ryoichi Ishii, 1991, Location behavior and spatial organization of multinational firms and their impact on regional transformation in East Asia: A comparative study of Japanese, Korean and US electronics finns, ICSEAD, Intermediate Research Report (University of Pennsylvania). Okumura, Shigeji, ed., 1987, Overlook of Asian new industrialization, Tokyo University Press, Tokyo, in Japanese. Pred, Alan R., 1977, City systems in advanced economies (Hutchingson, London). Ray, C.L. and R.L. Rittenoure, 1987, Recent regional growth patterns: More inequality, Economic Development Quarterly 1,240-8. Sassen, Saskia, 1991, The Global City: New York, London, Tokyo (Princeton University Press, Princeton). Tabuchi, Takatoshi, 1987, Interregional income differentials and migration: Their interrelationships, Regional Studies 22, 1-10. Vining, D.R., R. Pallone and D. Plane, 1981, Recent migration patterns in the developed world: A classification of some differences between our and IIASA's findings, Environment and Planning A 13, 143-50. Williamson, Jeffrey, 1965, Regional inequality and the process of national development: A description of the patterns, Economic Development and Cultural Change 13, 3-45. Yada, Yoshifumi and Akio Imamura, eds., 1991, Analysis of the Southeast economic area of Japan, (Minerva Shobo, Kyoto) in Japanese.