Joint Discussion Paper Series in Economics 37-2013
This study considers the factors behind municipality amalgamations in Japan from fiscal year 1999 to 2005 using event history analysis. We use discrete-time logit model and 21,165 parson-year data. Our findings show that the central government's carrot and stick policy strongly influenced municipality amalgamations for those with high ratios of inter-governmental grants to total revenue. Moreover, neighboring municipalities became the trigger for the amalgamation of other municipalities.