Technological distance between manufacturing sectors and prefectures in Japan: innovative clusters and patents

This paper examines the effects of technological distance on the performance of manufacturing sectors relative to the proximity of R&D activities in adjacent prefectures in Japan, and identifies agglomeration effects in innovation and productivity. This analysis provides constructive insights to new start‐up firms, in a more empirical way, to assist them establish R&D centers or production centers in order to leverage performance, thereby increasing the probability of success. A central objective is to elucidate the inside of the “black box” leveraging technological proximity induced by patents registration performance as a proxy for innovation by identifying the governing factors such as R&D investment and technology stock. This can be of great benefit to policy researchers as it provides a better understanding of the dynamism involved in regional innovation systems and the impacts of clustering and research policy. On the basis of the foregoing analysis, the technological activity provides an overview of the dynamism of an industrial structure with respect to the contribution and impact of input (i.e. R&D investment, techology stock), output (i.e. registered patents) and performance (i.e. agglomeration of production) proxies in Japan.