Driving factors of urban shrinkage: Examining the role of local industrial diversity

Extant literature identifies cities with continuous population loss, massive housing vacancy, and under-use of urban infrastructure as shrinking cities. Meanwhile, we found that some single-industry cities have experienced a sharp conversion from booms to busts while multi-industry cities are more likely to sustain their prosperity. We constructed a new model integrating the typologies known from the literature with our new perspective in order to understand urban shrinkage better. Furthermore, we applied this model to the case of Japan, which has registered rapid shrinkage in 64% of its cities and presents a mixed picture of geographical population polarization. Looking at 790 Japanese cities, using population censuses from 1980 through to 2010, this study shows that there is a significant relationship between industrial diversity and population growth. We used a variant of the Herfindahl-Hirschman Index (HHI) and entropy measures to assess the relationship. The findings suggest that industrial diversity is essential in further exploring the reasons for city shrinkage. •Significant relationship exists between industrial diversity and population growth.•A variant of the HHI and entropy measures was used to assess the relationship.•Industrial diversity is essential in exploring the reasons for city shrinkage.