Research Institute of Economy, Trade and Industry (RIETI)

Displaying 1-40 of 54 results

  • White Papers // Jun 2011

    FDI In Emerging Economies: An Analysis In A Firm Heterogeneity Model

    In recent years, Japanese manufacturers in both competitive and less competitive sectors have penetrated emerging economies, and sales in 2008 by Japanese affiliates established via Foreign Domestic Investment (FDI) exceeded Japan's revenues from exports. To consider this phenomenon and the significance of FDI for emerging economies, this paper constructs a...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // May 2011

    Export And Productivity Under Different Export Market Conditions: Evidence From Japan

    The authors use a large dataset of Japanese manufacturing firms to compare the effects of export entry on productivity under different export market conditions. Using the established econometric procedures of Propensity Score Matching and Difference-in-Differences, they explicitly estimate the effects of export entry during two periods with fairly different export...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2011

    Changes In Japan~s Labor Market Flows Due To The Lost Decade

    The authors construct worker flows for the Japanese labor market in an internationally comparable manner, and study the consequences of the deep and lasting recession of the 1990s in the Japanese labor market. They analyze the changes in employment, unemployment and inactivity, as well as the worker flows between this...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2011

    Japan~s Labor Market Cyclicality And The Volatility Puzzle

    The search and matching model has recently come under criticism for its inability to account for some of the cyclical properties of the U.S. labor market. Shimer (2005) has shown that the basic version of the model is incapable of reproducing the volatility of the market tightness for reasonable movements...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2011

    Stochastic Origin Of Scaling Laws In Productivity And Employment Dispersion

    Labor and productivity play central roles in the aging population problem in all developed countries. The understanding of labor allocation among different productivity levels is required for policy issues, specifically, the dynamics of how workers are allocated and reallocated among sectors. The authors uncover an empirical fact that firm-level dispersions...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2011

    Culture And Diversity In Knowledge Creation

    Is the paradise of effortless communication the ideal environment for knowledge creation? Or, can the development of local culture in regions raise knowledge productivity compared to a single region with a unitary culture? In other words, can a real technological increase in the cost of collaboration and the cost of...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Are Capital Intensive Firms The Biggest Exporters?

    This paper starts out from the observation that the export shares of firms (export to sales ratio) vary greatly among firms, and tend to be systematically related to the firms' capital labour ratios. This observation cannot be explained by e.g. the standard Melitz model, since it predicts that all exporting...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Effects Of CEOs Characteristics On Internationalization Of Small And Medium Enterprises In Japan

    Recent heterogeneous-firm models of international trade suggest that productivity determines whether firms engage in export and foreign direct investment. However in practice, m Abstract any productive firms are not internationalized, whereas many unproductive firms are. This situation suggests that factors other than productivity influence internationalization. This paper examines a set...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Temporary Jobs And Globalization: Evidence From Japan

    Since the 1990s, there has been a rapid increase in the proportion of temporary workers in the Japanese workforce. This paper empirically explores a linkage between the shift from permanent to temporary workers in the Japanese manufacturing sector and economic globalization, using various industry level data. The authors find that...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Productivity Of Banks And Its Impact On The Capital Investments Of Client Firms

    This paper proposes one measure for the productivity of banks and studies how it affects the sensitivity of a client firm's capital investment with respect to investment opportunity. As a direct measure for the productivity of banks, the authors employ the risk-adjusted profit of an individual bank, which is considered...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Temporary Workers, Permanent Workers, And International Trade: Evidence From Japanese Firm-Level Data

    The number of temporary workers in Japan's labor market has increased rapidly since the 1990s. This trend is particularly remarkable in the manufacturing sector, which now relies on sales to foreign markets. This paper formalizes the idea that global competition may encourage manufactures to shift from permanent to temporary workers,...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Trade Liberalization And FDI Strategy In Heterogeneous Firms: Evidence From Japanese Firm-Level Data

    This paper attempts to clarify the reasons for the rapid growth of FDI in developing countries, particularly East Asian countries, compared with that of FDI in developed countries. To do this, the authors will examine the mechanics of HFDI and VFDI with a view toward shedding light on the role...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Quality Of Labor, Capital, And Productivity Growth In Japan: Effects Of Employee Age, Seniority, And Capital Vintage

    An aging population, low fertility rate, and suppressed corporate investment have left Japan with an older workforce and older vintages of fixed capital. To restore economic dynamism, Japan must encourage productivity growth. Using panel data of listed Japanese firms in FY 1977 - 2008, this paper demonstrates how both employee...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Measuring Human Capital In Japan

    This paper measures human capital development in the Japanese workforce after WWII. An increase in workers' years of schooling is believed to have aided Japan's economic growth after WWII. The development of human capital has acquired increasing importance for Japan's future economic growth given its aging population. To quantify these...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Feb 2011

    A Financial Crisis In A Monetary Economy

    The authors generalize Lagos and Wright's (2005) framework for a monetary economy in a way that there exist two technologies, "High" and "Low," for producing the goods in a decentralized matching market. The high technology is more productive than the low technology, while the agents who use the high technology...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Feb 2011

    A Model Of Financial Crises: Coordination Failure Due To Bad Assets

    This paper constructs a model of financial crises that can explain characteristic features of the global financial crisis of 2008-2009, namely, the widespread freezing of asset transactions, the sharp contraction of aggregate output, and deterioration in the labor wedge. This paper assumes that banks sell corporate bonds in the interbank...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Feb 2011

    A Bad-Asset Theory Of Financial Crises

    The authors propose a simple model of financial crises, which may be useful for the unified analysis of macro and financial policies implemented during the 2008-2009 financial crisis. A financial crisis is modeled as the disappearance of inside money due to the lemon problem ? la Akerlof (1970), in a...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Feb 2011

    Financial Crises And Assets As Media Of Exchange

    The authors construct a monetary model of financial crises that can explain two characteristic features of the global financial crisis in 2008/2009, namely, the widespread freeze of asset transactions and a sharp contraction in aggregate output. They assume that the assets, such as real estate, work as media of exchange...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Feb 2011

    An Application Of Business Cycle Accounting With Misspecified Wedges

    It is often assumed that wedges evolve according to the VAR (1) in the applications of Business Cycle Accounting (BCA). However, recent research finds that the wedges have no VAR (1) representation in many Dynamic Stochastic General Equilibrium (DSGE) economies, and that there might be a misspecification of the stochastic...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jan 2011

    Accounting For China's Growth In 1952-2008: China's Growth Performance Debate Revisited With A Newly Constructed Data Set

    Using a "Data fundamentalist approach," this paper revisits the long debate about China's growth performance by seriously tackling the existing data problems that have been the major obstacles to a proper assessment of China's growth performance. First, this paper examines and adjusts the serious break in the official employment statistics...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Dec 2010

    Heterogeneity And The Structure Of Exports And FDI: A Cross-Industry Analysis Of Japanese Manufacturing

    The fraction of exporters and MultiNational Enterprises (MNEs) varies substantially across industries. The authors extend the firm heterogeneity model presented by Helpman et al. (2004) to derive testable predictions about the prevalence of these internationalized modes. The model indicates that intra-industry firm heterogeneity and R&D intensity play large roles in...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Nov 2010

    Asset Prices And Monetary Policy On A Sticky-Price Economy With Financial Frictions

    A recent study shows that equilibrium indeterminacy arises if monetary policy responds to asset prices, especially share prices, in a sticky-price economy. The authors show that equilibrium indeterminacy never arise if the working capital of firms is subject to their asset values by financial frictions. Should monetary policy respond to...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Oct 2010

    Anatomy Of Learning-From-Exporting: Role Of Foreign Knowledge Acquisition

    The essence of learning-from-exporting can be thought of as a process in which exporters absorb international knowledge spillovers and feed it back to their innovation efforts. Learning-from exporting is often difficult to observe because it is conditional on at least two efforts: information gathering from foreign markets and zealous R&D....

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Oct 2010

    Does Japanese Liquor Taste Different?: Empirical Analysis On The National Treatment Under The WTO

    The national treatment obligation, along with most favored nation obligation, is an important principle of non-discrimination adopted by the WTO. It requires that foreign products be treated no less favorably than national products. This paper empirically examines the 1996 WTO recommendation that a Japanese distilled alcohol beverage, shochu, is a...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Oct 2010

    The Structure Of Enterprise Law: Interrelationships Among Contracts, Markets, And Laws In The Bargaining Structure Of The Firm

    The firm is an ongoing joint project requiring both financial and human capital. Like other joint projects, the firm cannot maximize added value without achieving an efficient incentive bargain among the indispensable capital providers, i.e., shareholders and creditors as the monetary capital providers, and management and employees as the human...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Aug 2010

    Service Sector Productivity In Japan: The Key To Future Economic Growth

    This paper aims to examine three issues: how bad the productivity performance in Japan's service sector has been; why it is important to accelerate TFP growth in the service sector; and why TFP has stagnated in Japan's service sector. The main findings of the paper are as follows. First, TFP...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Aug 2010

    Global Fixed Capital Investment By Multinational Firms

    This paper develops and tests a simple model of the simultaneous determination of gross fixed capital formation by multinational Japanese firms in home and host countries. The authors treat multinational firms as multi-product firms, choosing optimal investment locations and production scale for each product. They test the predictions of the...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Aug 2010

    Repayment Enforcement And Informational Advantages: Empirical Determinants Of Trade Credit Use

    Using unique data the authors test various trade credit theories and find the following. First, the length of a buyer-seller relationship has a positive impact on the use of trade credit, especially for longer-term credit. In contrast, short-term trade credit is extended based on buyers' hard information. Second, trade credit...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jun 2010

    Small Business Credit Scoring: Evidence From Japan

    This paper studies the Japanese credit scoring market using data on 2,000 SMEs and a small business credit scoring model widely used in the market. After constructing a model for determining a bank's profit maximization, the authors find the optimum loan sizes and profit levels, and point out some lending...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jun 2010

    Shared Renewable Resource And International Trade: Technical Measures For Fisheries Management

    The authors examine trade and strategic interaction between countries that enforce technical measures for fisheries management (e.g., restrictions on fishing gears, vessels, areas and time) when countries share access to a common resource stock. Although technical measures are important as basic management tools, compliance with such measures makes it more...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // May 2010

    Regional Monetary Coordination In Asia After The Global Financial Crisis: Comparison In Regional Monetary Stability Between ASEAN+3 And ASEAN+3+3

    This paper analyzes how much deviation the authors have among Asian currencies, which include the Indian rupee, the Australian dollar, and the New Zealand dollar, given that they are discussing the East Asian Community based on ASEAN+3 (Japan, China, and South Korea)+3 (India, Australia, and New Zealand). They investigate whether...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // May 2010

    How Do Chinese Industries Benefit From FDI Spillovers?

    Recently, Foreign Invested Enterprises (FIEs) in China have increased their investment in not only production activity but also R&D activity. This paper examines the impact of spillovers from such activities on two types of innovations by Chinese domestic firms: Total Factor Productivity (TFP) and invention patent application, using comprehensive industry...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2010

    Subsidies, Fisheries Management, And International Trade

    The WTO members are conducting negotiations to clarify and improve disciplines on fisheries subsidies at the Doha Round. In this paper, the author investigates how worldwide subsidy reform in the fisheries sector could affect fisheries output and resource stocks in a trading equilibrium. Using a simple static model of variable...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2010

    Stakeholder-Oriented Corporate Governance And Firm-Specific Human Capital: Wage Analysis Of Employer-Employee Matched Data

    Theories of economic institutions predict that complementarity exists between the nature of corporate governance of a firm and the nature of its human capital investment. The complementarity theory insists that the commitment of a firm and its employees to invest in firm-specific human capital will be reinforced by the commitment...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jan 2010

    Trade Creation And Diversion Effects Of Regional Trade Agreements On Commodity Trade

    This paper examines the impacts of Regional Trade Agreements (RTAs) on commodity trade, with a particular focus on trade creation and diversion effects. Based on the estimation of the gravity equation for commodity trade, dealing with zero-trade flow and endogeneity problems, the authors analyze the impacts of various types of...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Dec 2009

    Stock Ownership And Corporate Performance In Japan: Corporate Governance By Institutional Investors

    Faced with an aging population and a low fertility rate, Japan finds it increasingly essential to shift diminishing national savings into productive investment in order to preserve the dynamism of its economy. Stock investment by institutional investors is important for corporate financing, and shareholder involvement in governance influences corporate growth....

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Oct 2009

    A Two-Dimensional Analysis Of The Impact Of Outward FDI On Performance At Home: From Japanese Manufacturing Firm

    This paper empirically investigates two areas of changes in firm behavior and performance at home before and after investing abroad. The first is the type of foreign direct investment (FDI): horizontal FDI or vertical FDI. The second is the firm's domestic activities of interest: production activity and non-production activity. From...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Sep 2009

    Optimal Monetary Policy When Asset Markets Are Incomplete

    This paper considers the properties of an optimal monetary policy when households are subject to counter-cyclical uninsured income shocks. The authors develop a tractable incomplete-markets model with Calvo price setting. In the model the welfare cost of business cycles is large when the variance of income shocks is counter-cyclical. Nevertheless,...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Sep 2009

    International Production Networks And Export/Import Responsiveness To Exchange Rates: The Case Of Japanese Manufacturing Firms

    This paper examines how international production/distribution networks provide individual firms with exporting/importing responsiveness to exchange rate movements. With the micro-data of Japanese manufacturing firms from 1994 to 2004, the authors find that firms' exports tend to respond to exchange rate movements, in particular when firms are large in size, when...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Sep 2009

    Globalization, Productivity And Plant Exit - Evidence From Japan -

    During the 1980s and 1990s, Japanese manufacturers began to relocate production from sites in Japan to low-wage East Asian countries such as China, Malaysia and Thailand. Imports of manufacturing goods increased substantially over the same period. This rapid rise in imports, and proliferation of globalization, has led to concerns among...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jul 2009

    A Monetary Model Of Banking Crises

    The authors propose a new model for policy analysis of banking crises (or systemic bank runs) based on the monetary framework developed by Lagos and Wright (2005). If banks cannot enforce loan repayment and have to secure loans by collateral, a banking crisis due to coordination failure among depositors can...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Aug 2009

    Software Patent And Its Impact On Software Innovation In Japan

    In Japan, the software patent system has been reformed and now software has become a patentable subject matter. In this paper, this pro-patent shift on software is surveyed and its impact on software innovation is analyzed. Before the 1990's, inventions related to software could not be patented by themselves, but...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jul 2009

    Equity Markets And Institutions: The Case Of Japan

    Corporate ownership and financing in Japan in the 20th century are striking. In the first half of the 20th century equity markets were active in raising more than 50% of the external financing of Japanese companies. Ownership was dispersed both by the standards of other developed economies at the time...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // May 2009

    Transboundary Renewable Resource And International Trade

    The authors develop a two-country, two-good model with a transboundary renewable resource. A transboundary renewable resource is an open-access resource that is shared by two countries. They characterize the autarkic steady state, and then examine the patterns of trade and the post-trading steady-state utility levels. Although the resource stock is...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jun 2009

    Customer Relationships And The Provision Of Trade Credit During A Recession

    The authors investigate the effect of close customer relationships on small firms' provision of trade credit during the 2001 - 2003 recessions in Japan. Many studies argue that close customer relationships are costly for suppliers because when their main customer has a high proportion of the firm's total sales, suppliers...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2009

    Asset-Price Collapse And Market Disruption - A Model Of Financial Crises -

    The authors construct a search-theoretic model 'a la Lagos and Wright (2005), that has multiple steady-state equilibria, one of which may be interpreted as a state of financial crisis. The key ingredient is the collateral-secured loan in the decentralized matching market, in which the borrowers must put up their own...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Sep 2009

    Globalization, Productivity And Plant Exit - Evidence From Japan -

    During the 1980s and 1990s, Japanese manufacturers began to relocate production from sites in Japan to low-wage East Asian countries such as China, Malaysia and Thailand. Imports of manufacturing goods increased substantially over the same period. This rapid rise in imports, and proliferation of globalization, has led to concerns among...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Sep 2009

    Optimal Monetary Policy When Asset Markets Are Incomplete

    This paper considers the properties of an optimal monetary policy when households are subject to counter-cyclical uninsured income shocks. The authors develop a tractable incomplete-markets model with Calvo price setting. In the model the welfare cost of business cycles is large when the variance of income shocks is counter-cyclical. Nevertheless,...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Are Capital Intensive Firms The Biggest Exporters?

    This paper starts out from the observation that the export shares of firms (export to sales ratio) vary greatly among firms, and tend to be systematically related to the firms' capital labour ratios. This observation cannot be explained by e.g. the standard Melitz model, since it predicts that all exporting...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Effects Of CEOs Characteristics On Internationalization Of Small And Medium Enterprises In Japan

    Recent heterogeneous-firm models of international trade suggest that productivity determines whether firms engage in export and foreign direct investment. However in practice, m Abstract any productive firms are not internationalized, whereas many unproductive firms are. This situation suggests that factors other than productivity influence internationalization. This paper examines a set...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Aug 2010

    Service Sector Productivity In Japan: The Key To Future Economic Growth

    This paper aims to examine three issues: how bad the productivity performance in Japan's service sector has been; why it is important to accelerate TFP growth in the service sector; and why TFP has stagnated in Japan's service sector. The main findings of the paper are as follows. First, TFP...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jan 2010

    Trade Creation And Diversion Effects Of Regional Trade Agreements On Commodity Trade

    This paper examines the impacts of Regional Trade Agreements (RTAs) on commodity trade, with a particular focus on trade creation and diversion effects. Based on the estimation of the gravity equation for commodity trade, dealing with zero-trade flow and endogeneity problems, the authors analyze the impacts of various types of...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Sep 2009

    International Production Networks And Export/Import Responsiveness To Exchange Rates: The Case Of Japanese Manufacturing Firms

    This paper examines how international production/distribution networks provide individual firms with exporting/importing responsiveness to exchange rate movements. With the micro-data of Japanese manufacturing firms from 1994 to 2004, the authors find that firms' exports tend to respond to exchange rate movements, in particular when firms are large in size, when...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Temporary Jobs And Globalization: Evidence From Japan

    Since the 1990s, there has been a rapid increase in the proportion of temporary workers in the Japanese workforce. This paper empirically explores a linkage between the shift from permanent to temporary workers in the Japanese manufacturing sector and economic globalization, using various industry level data. The authors find that...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jan 2011

    Accounting For China's Growth In 1952-2008: China's Growth Performance Debate Revisited With A Newly Constructed Data Set

    Using a "Data fundamentalist approach," this paper revisits the long debate about China's growth performance by seriously tackling the existing data problems that have been the major obstacles to a proper assessment of China's growth performance. First, this paper examines and adjusts the serious break in the official employment statistics...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Aug 2010

    Global Fixed Capital Investment By Multinational Firms

    This paper develops and tests a simple model of the simultaneous determination of gross fixed capital formation by multinational Japanese firms in home and host countries. The authors treat multinational firms as multi-product firms, choosing optimal investment locations and production scale for each product. They test the predictions of the...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // May 2010

    Regional Monetary Coordination In Asia After The Global Financial Crisis: Comparison In Regional Monetary Stability Between ASEAN+3 And ASEAN+3+3

    This paper analyzes how much deviation the authors have among Asian currencies, which include the Indian rupee, the Australian dollar, and the New Zealand dollar, given that they are discussing the East Asian Community based on ASEAN+3 (Japan, China, and South Korea)+3 (India, Australia, and New Zealand). They investigate whether...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jun 2011

    FDI In Emerging Economies: An Analysis In A Firm Heterogeneity Model

    In recent years, Japanese manufacturers in both competitive and less competitive sectors have penetrated emerging economies, and sales in 2008 by Japanese affiliates established via Foreign Domestic Investment (FDI) exceeded Japan's revenues from exports. To consider this phenomenon and the significance of FDI for emerging economies, this paper constructs a...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // May 2011

    Export And Productivity Under Different Export Market Conditions: Evidence From Japan

    The authors use a large dataset of Japanese manufacturing firms to compare the effects of export entry on productivity under different export market conditions. Using the established econometric procedures of Propensity Score Matching and Difference-in-Differences, they explicitly estimate the effects of export entry during two periods with fairly different export...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Aug 2010

    Repayment Enforcement And Informational Advantages: Empirical Determinants Of Trade Credit Use

    Using unique data the authors test various trade credit theories and find the following. First, the length of a buyer-seller relationship has a positive impact on the use of trade credit, especially for longer-term credit. In contrast, short-term trade credit is extended based on buyers' hard information. Second, trade credit...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Feb 2011

    A Financial Crisis In A Monetary Economy

    The authors generalize Lagos and Wright's (2005) framework for a monetary economy in a way that there exist two technologies, "High" and "Low," for producing the goods in a decentralized matching market. The high technology is more productive than the low technology, while the agents who use the high technology...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Feb 2011

    A Model Of Financial Crises: Coordination Failure Due To Bad Assets

    This paper constructs a model of financial crises that can explain characteristic features of the global financial crisis of 2008-2009, namely, the widespread freezing of asset transactions, the sharp contraction of aggregate output, and deterioration in the labor wedge. This paper assumes that banks sell corporate bonds in the interbank...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Feb 2011

    A Bad-Asset Theory Of Financial Crises

    The authors propose a simple model of financial crises, which may be useful for the unified analysis of macro and financial policies implemented during the 2008-2009 financial crisis. A financial crisis is modeled as the disappearance of inside money due to the lemon problem ? la Akerlof (1970), in a...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Feb 2011

    Financial Crises And Assets As Media Of Exchange

    The authors construct a monetary model of financial crises that can explain two characteristic features of the global financial crisis in 2008/2009, namely, the widespread freeze of asset transactions and a sharp contraction in aggregate output. They assume that the assets, such as real estate, work as media of exchange...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Productivity Of Banks And Its Impact On The Capital Investments Of Client Firms

    This paper proposes one measure for the productivity of banks and studies how it affects the sensitivity of a client firm's capital investment with respect to investment opportunity. As a direct measure for the productivity of banks, the authors employ the risk-adjusted profit of an individual bank, which is considered...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Temporary Workers, Permanent Workers, And International Trade: Evidence From Japanese Firm-Level Data

    The number of temporary workers in Japan's labor market has increased rapidly since the 1990s. This trend is particularly remarkable in the manufacturing sector, which now relies on sales to foreign markets. This paper formalizes the idea that global competition may encourage manufactures to shift from permanent to temporary workers,...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Trade Liberalization And FDI Strategy In Heterogeneous Firms: Evidence From Japanese Firm-Level Data

    This paper attempts to clarify the reasons for the rapid growth of FDI in developing countries, particularly East Asian countries, compared with that of FDI in developed countries. To do this, the authors will examine the mechanics of HFDI and VFDI with a view toward shedding light on the role...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Quality Of Labor, Capital, And Productivity Growth In Japan: Effects Of Employee Age, Seniority, And Capital Vintage

    An aging population, low fertility rate, and suppressed corporate investment have left Japan with an older workforce and older vintages of fixed capital. To restore economic dynamism, Japan must encourage productivity growth. Using panel data of listed Japanese firms in FY 1977 - 2008, this paper demonstrates how both employee...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Mar 2011

    Measuring Human Capital In Japan

    This paper measures human capital development in the Japanese workforce after WWII. An increase in workers' years of schooling is believed to have aided Japan's economic growth after WWII. The development of human capital has acquired increasing importance for Japan's future economic growth given its aging population. To quantify these...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2011

    Changes In Japan~s Labor Market Flows Due To The Lost Decade

    The authors construct worker flows for the Japanese labor market in an internationally comparable manner, and study the consequences of the deep and lasting recession of the 1990s in the Japanese labor market. They analyze the changes in employment, unemployment and inactivity, as well as the worker flows between this...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2011

    Japan~s Labor Market Cyclicality And The Volatility Puzzle

    The search and matching model has recently come under criticism for its inability to account for some of the cyclical properties of the U.S. labor market. Shimer (2005) has shown that the basic version of the model is incapable of reproducing the volatility of the market tightness for reasonable movements...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2011

    Stochastic Origin Of Scaling Laws In Productivity And Employment Dispersion

    Labor and productivity play central roles in the aging population problem in all developed countries. The understanding of labor allocation among different productivity levels is required for policy issues, specifically, the dynamics of how workers are allocated and reallocated among sectors. The authors uncover an empirical fact that firm-level dispersions...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2011

    Culture And Diversity In Knowledge Creation

    Is the paradise of effortless communication the ideal environment for knowledge creation? Or, can the development of local culture in regions raise knowledge productivity compared to a single region with a unitary culture? In other words, can a real technological increase in the cost of collaboration and the cost of...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jan 2009

    TFP Growth Slowdown And The Japanese Labor Market In The 1990s

    Unemployment in Japan nearly tripled during the 1990s. Underlying this upsurge lie an increase in the probability of workers to lose their jobs and a decrease in the probability that the unemployed find jobs. This paper analyzes the sources responsible for these labor market changes in Japan in the decade...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Feb 2009

    Can East Asia Be An Engine Of Growth For The World Economy?

    The U.S. functioned as an engine of growth until the financial crisis. Now, U.S. imports have plummeted. This paper considers whether East Asia can be an engine of growth. Using data on consumption imports from 27 countries, the results indicate that income increases in East Asian countries would cause large...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2009

    Financial Crisis, Firm Dynamics And Aggregate Productivity In Japan

    Using a dynamic general equilibrium model of firm dynamics that incorporates financial intermediation costs, the authors quantify the degree to which the deterioration in the health of banks during the Japanese banking crisis had an impact on aggregate productivity through firm dynamics. They find that the deterioration of bank health...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Apr 2009

    Mergers, Innovation, And Productivity: Evidence From Japanese Manufacturing Firms

    The authors investigate the impact of merger on innovation and efficiency using a micro dataset of Japanese manufacturing firms including unlisted firms during the period of 1995-1999. They find that the acquirer's Total Factor Productivity (TFP) decreases immediately after mergers and does not significantly recover to the pre-merger level within...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jul 2009

    Quantitative Evaluation Of Determinants Of Export And FDI: Firm-Level Evidence From Japan

    This paper examines determinants of the export and FDI decision, using firm-level data for Japan. The contribution of this paper is twofold. First, this paper employs a mixed logit model to incorporate unobserved firm heterogeneity. Second, special attention is paid to quantitative evaluation of effects of the covariates. The authors...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jun 2009

    Redistributional View Of Trade Credit Revisited: Evidence From Micro Data Of Japanese Small Firms

    This paper investigates the redistributional view of trade credit from the demand side, based on a unique micro data of Japanese small firms where information on transactions of intermediate goods between firms of different size is available. The redistributional hypothesis is tested in two steps. In the first step the...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)

  • White Papers // Jun 2010

    Small Business Credit Scoring: Evidence From Japan

    This paper studies the Japanese credit scoring market using data on 2,000 SMEs and a small business credit scoring model widely used in the market. After constructing a model for determining a bank's profit maximization, the authors find the optimum loan sizes and profit levels, and point out some lending...

    Provided By Research Institute of Economy, Trade and Industry (RIETI)