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To continue Japanese rice production under strong pressure from trade liberalization, it is important to improve rice total factor productivity (TFP). This study quantified Japanese rice TFP by the Törnqvist-Thile index and Malmquist index and estimated chronological trends of rice TFP by applying a spatial econometric model with consideration of spatial interaction. The regional convergence criterion, b convergence, and the absolute convergence criterion,  convergence, were taken into account to reveal the trends. The results demonstrated that statistical testing power became weak in the b convergence model, if spatial interaction effects were ignored. This is probably due to the regionally synchronized effects of climate change. Second, there were some periods which show different trends between Törnqvist-Thile index and Malmquist index as well as b convergence and  convergence criteria. Third, most indexes suggested that Japanese rice TFP converged among 38 prefectures during the 1990s, but that the convergence trend stopped in the 2000s. Based on these findings, policy support needs to be reconsidered to allow less productive regions to catch up to highly productive ones.

The Trend of Regional Gaps in Japanese Rice Total Factor Productivity: Fact findings from spatial econometric analysis