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Institute of Economic Research Hitotsubashi University
2-1 Naka, Kunitachi City,
Tokyo 186-8603, JAPAN
Tel
+81 42 580 8327
Fax
+81 42 580 8333
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| Economic Review Vol. 57, 2006 Abstracts |
| Vol. 57, No. 1 2006 |
pp.1-15
“A Reconsideration of Developing Factors for the Japanese Sericulture Industry
—From the Viewpoint of Comparative History of Technology—”
Yukihiko Kiyokawa (Institute of Economic Research, Hitotsubashi University)
The sericulture industry of Japan had realized very rapid accelerated growth
during the period from the beginning of Meiji to early Showa.
This paper aims to clarify the factors promoting such a rapid development
by paying special attention to technological innovations in the industry.
We found two major innovations which were not observable in any other sericultural country
such as China, India, Italy and France.
One of them was the re-reeling system of raw silk from a small reel to a large one.
This system made it possible to test the raw silk for each individual reeler.
The testing encouraged adoption of a quality-oriented piece-rate wage system in many filatures.
Thus the re-reeling system realized gradual improvements of raw silk quality,
particularly in the Taisho period.
Another unique innovation was an expansion of summer-fall rearings of bi-voltine silkworms
by improving their poor quality through hybridization.
The rearing was also encouraged by development of the low temperature incubation method
in popular uses of mountainside caves.
Furthermore, the cocoon production by bi-voltine silkworms was promoted
by development of the F1 hybridization method and the artificial hatching method.
All of these innovations contributed to realize the bivoltinity-centered sericulture industry in Japan.
pp.16-29
“Impacts of the Economic Reform on Firm Size and Production Efficiency
—Evidence from the Machine Tool Industry in China—”
Deqiang Liu (Tokyo Gakugei University)
An earlier study by Otsuka, Liu and Murakami(1998) found that
there existed significant scale diseconomies among machine tool enterprises in the beginning of the 1990s
following the market reform for intermediate inputs in China.
Using our own survey data collected in 1992 and 2003,
this study traces the economic reform process and the changes
in enterprise scale and productivity in the machine tool industry.
Based on a Cobb-Douglas production function estimated by the two stage least squares method,
we find that the significant scale diseconomy among machine tool enterprises disappeared
after the implementation of enterprise reform, which drastically reduced employment size of large enterprises.
pp.30-44
“Competition among Firms for the Survival and the Process ofthe Industrial Development
—The Development of Motorcycle Industry in Postwar Japan, 1948-1964—”
Eiji Yamamura (Faculty of Economics, Seinangakuin University)
This article explores the evolutionary process of industrial development accompanying with
the firm's entry, exit, and quality upgrading of engine,
based on a case study of the motorcycle industry in postwar Japan.
We divided this period into three stages:
the “entry stage”, “exit stage”, and the “convergence stage”.
We test the determinants of firm's survival and the quality level of motorcycles,
the firm level data sets and econometric techniques.
The results of the estimations indicate that learning by doing positively affects a firm's duration and,
that clusters play an important role in the quality through the innovation and diffusion of knowledge.
pp.45-57
“Network Structure of Japanese Labor Market
—An Analysis Using Prefectural Datasets—”
Katsuhide Isa (Institute of Economic Research, Hitotsubashi University)
In this paper I analyzed the time series trend of regional labor mobility
based on a mobility index (the Shorrocks index) using two datasets compiled by Ministry of Health, Labor and Welfare,
namely the Annual Report on Labor Market (ARLM) and the Survey on Employment Trends (SET).
The former records labor mobility through public employment services (PES),
while the latter is a national survey conducted on a broader scale.
At the 47-prefectural level, it was found that the ARLM-based index has been gradually on the rise
since the end of 1990's, while the SET-based index has been consistently on the decline throughout the sample period.
There may be some structural factors specific to PES, as well as cyclical ones behind the difference them.
On the other hand, at the 13-regional level, it was found that
inter-regional mobility has become increasingly inactive throughout the sample period in both datasets.
This fact may possibly indicate the advent of a regionally segmented labor market in Japan.
pp.58-71
“The Estimation of GARCH-types of Models with Multiple Change Points in Japanese Stock Returns”
Takayuki Shiohama (Institute of Economic Research, Hitotsubashi University)
In recent years there has been considerable development in estimating and testing regime points in economic and financial time series.
In this paper we investigate the unknown change points in Japanese stock returns based on the GARCH types of models.
March 4, 1999, April 14, 2000, and May 6, 2004 were estimated as the main change points though the results
were different depending on the model used for the analysis.
We found the following facts:
(1) the persistence of shocks in volatility was relatively small from March 5, 1999 to April 14, 2000;
(2) the unconditional variances of stock returns were greatly decreased after May 6, 2004;
(3) the brand replacement in Nikkei 225 on April 24, 2004 caused the changes in serial correlations in Nikkei 225 index.
pp.72-91
“An Analytical Foundation for Normative Economic Theories of Welfare States”
Naoki Yoshihara (Institute of Economic Research, Hitotsubashi University)
In this paper we propose an analytical foundation for normative economic theories of welfare state policies.
First, we argue that the so-called “neo-liberalistic” reorganization of welfare states
may be justified by the conventional, welfaristic welfare economics.
Secondly, criticizing the welfaristic evaluation of social and economic policies,
we propose a more comprehensive framework for social evaluations of polices,
which can respect both welfaristic values and non-welfaristic values.
Such a framework is formalized as an extended social welfare function (ESWF),
which assigns to each economy an ordering on the pairs of resource allocations and allocation mechanisms.
Thirdly, we propose three basic values, labor sovereignty, non-welfaristic distributive justice,
and the Pareto principle, all of which ESWFs should satisfy.
Then, we discuss under what conditions there exists a reasonable ESWF which respects these three values.
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| Vol. 57, No. 2 2006 |
pp.97-109
“The Collaterization Movement in Bond Issue in Prewar Japan
—Special Interest Politics vs. the Role of Economic Policy Considerations—”
Juro Teranishi (Institute of Economic Research, Hitotsubashi University)
In prewar Japan, the 1920s witnessed a significant surge of default on corporate bonds.
To cope with this problem, Japan promoted collaterization of bond issues.
This movement, implemented by the banking sector led by Industrial Bank of Japan and Bank of Japan,
stands in close contrast with the policy adopted in the US,
where a similar problem was addressed by the strengthening of information disclosure requirement for issuing firms.
Conventional views ascribe the reason for the Japan's policy response
either to the intention of credit rationing of bonds by the planning-oriented government or to the special interest politics
between the banks with vested interests in the suppression of bond markets and the security companies.
This paper examines and denies both of these conventional views.
As an alternative hypothesis, the paper suggests that Japan's policy was implemented
so as to reduce the costs caused by defaults in terms of time and negotiation costs.
Imminent policy by the government to return to the Gold Standard was expected to
cause significant deflation impacts including a drastic increase in bond defaults.
This is why Junnosuke Inoue, the chief proponent of the gold embargo policy,
was so ardent to promote the bond collaterization movement.
pp.110-120
“Bad Loans and Loan Write-Offs”
Shin-ichi Fukuda (University of Tokyo),
Satoshi Koibuchi (University of Tokyo)
In this paper, we investigate who bears the burden when writing off bad loans in Japan.
Traditionally, Japanese main banks bore large burdens in saving their customers.
We still find that some main banks bear a large burden in saving their customers.
However, in most cases, main banks became very reluctant to bear large burden
when bailing out their customers. In the transition from bank-based system to market-based system,
traditional implicit rules are collapsing dramatically.
We suggest that companies supported by Industrial Revitalization Corporation of Japan
may provide a new scheme for who bears the burden when writing off loans in Japan.
pp.121-135
“Industrialization, Foreign Direct Investment and Firms' Fund Mobilization in Southeast Asia”
Fumiharu Mieno (Graduate School of International Cooperation Studies, Kobe University)
The paper examines the features of firms' fund mobilization in the process of Southeast Asian industrialization,
using firm level data for Thailand and Malaysia.
We found that while the function of commercial bank intermediation for foreign firms is substantially limited,
the foreign firms finance their investment through their own financial networks.
On the other hand, capital markets do not play an important role in their fund mobilization.
pp.136-150
“Transformation in the Structure of the Russian Economy (1991-2005)”
Shinichiro Tabata (Slavic Research Center, Hokkaido University)
Specific features of transformation in the structure of the Russian economy during the period
from 1991 to 2005 were analyzed, when the system transformation was being carried out.
Major findings include
1) the emergence of a new mechanism of economic growth based on household consumption,
2) the significance of imported consumer goods in the new mechanism,
financed by the large amount of foreign currency earned by exports of mineral resources such as oil and gas, and
3) the importance of the shift in comparative advantage of the Russian goods caused by
considerable in exchange rates of the ruble in real terms.
pp.151-164
“Transition and Corruption in the Former Soviet States”
Ichiro Iwasaki (Institute of Economic Research, Hitotsubashi University),
Taku Suzuki (Graduate Student of Economics, Hitotsubashi University)
It is difficult to find, at a glance, a clear connection between corruption and the reform processes
in the states of the former Soviet Union (FSU).
The key to untangling this issue is to look at the peculiarities of their transition strategies
and economic crises compared with those of Central and Eastern European countries.
This paper aims to unravel the complex ties between the transition process and corruption
in the FSU states through theoretical and empirical analyses of the impact of multiple factors.
These factors include the extent of decentralization of the government-enterprise relationship
and the degree of state intervention in corporate management as well as the impact of economic crises
that have been affecting the frequency and degree of corporate exploitation and state capture.
In this manner, our study aims to complement earlier achievements in this field.
pp.165-187
“Pension Reforms in Transition Countries”
Yoshiaki Nishimura (Institute of Economic Research, Hitotsubashi University)
This paper examines developments of pension reforms since 1990's in the transition countries,
especially in the three Central European countries, Russia and Kazakhstan,
and it reveals characteristic features of the reforms in those countries.
The transition countries have been confronting with three common tasks in the field of pension reforms:
(1) a departure from old pension systems under the socialist regime,
(2) pension reforms as a countermeasure against a transitional deep depression of an economy,
(3) efforts to tackle with aging problems.
But it is clarified that a common key question in the pension reforms is whether and how to
introduce a mandatory private funded scheme into the pubic pension system,
which has been strongly recommended by the World Bank, and that new systems
as a result of the reforms vary widely in this respect in various countries.
This paper underlines that deficits not only in the balance of the pension budget in the given country,
but also in its balance of government budget and in its international balance of payment
have influenced the pension reforms seriously.
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| Vol. 57, No. 3 2006 |
pp.193-207
“The Welfare Economic Studies of Tokuzo Fukuda and their International Context”
Tamotsu Nishizawa (Institute of Economic Research, Hitotsubashi University)
In this paper I investigate the welfare economic studies of Tokuzo Fukuda,
a pioneer in the economics of Japan, in historical and intellectual context.
Through it I aim to clarify the problems of welfare economics and the welfare state and to show welfare economics
in its formative age as a pluralistic field in which many competing approaches were pursued.
Fukuda pursued the welfare economic studies based on labour problems from his maiden work with his teacher Brentano.
Strongly inspired by the welfare economics of Marshall and Pigou, Fukuda become more sympathetic to
Hobson's ethical and humanist approach along with the American institutionalists.
pp.208-223
“Interregional Population Migration in Russia:
Utilization of an Origin-to-Destination Table”
Kazuhiro Kumo (Institute of Economic Research, Hitotsubashi University)
This study examines regional economic conditions and their effects on interregional population redistribution patterns in Russia.
After reviewing striking changes in population flows before and after the collapse of the former Soviet Union,
an application of the gravity model on population migration in Russia in 2003 is presented,
using a newly obtained interregional in-and out-migration flow matrix, which is supplied by Rosstat (formerly Goskomstat).
Gross migration patterns in the 2000s, when large scale transformational population flows have ceased,
have not investigated so far in the existing literature.
The analysis conducted focuses on geographical factors, which have been basically omitted
in existing literature on migration patterns in transformational Russia.
The attractiveness of Moscow regions and resource-mining areas is clearly presented.
pp.224-235
“Agglomeration Economies in New Growth Sectors of Japanese Manufacturing Industry”
Akihiro Otsuka (Socio-economic Research Center, Central Research Institute of Electric Power Industry)
This paper examines the effects of industrial agglomeration on productivity growth in new growth sectors.
Our analysis employing 4-digit data of Japanese manufacturing industries shows that
1) ceramic, stone and clay products, general machinery, precision instruments and machinery,
enjoy the advantage generated by the close location to the other industries,
2) new manufacturing technology sectors, such as industrial robots tend to receive agglomeration effects,
although information technology sectors do not,
3) most new growth sectors gain profit from economies of scale at a very local level.
These findings reveal that the new growth sectors benefit from agglomeration effects and face to market competition.
pp.236-244
“Price-Quantity Competition between Marketing Channels”
Tatsuhiko Nariu (Graduate School of Economics, Kyoto University),
Hirotaka Suzuki (Graduate Student of Economics, Kyoto University)
Suppose that in a duopoly each producer sells his products through an affiliated retailer,
and that the former can charge a franchise fee to the latter.
Also suppose that the two retailers compete on quantity, although the two producers do on price.
In this setting, each producer cuts his shipping price when the market demand shifts upward.
Moreover, the shipping prices (which are usually strategic complements) become strategic substitutes.
pp.245-259
“Characters of the Suburban Society in Post-war Britain
—A Case Study of a New Town Social Survey—”
Ikki Suge (Faculty of Economics, Doshisha University)
This paper is re-examines the broadly-shared images of the working-class suburban society
as a monotonous and closed single-class society and the so-called “suburban neurosis”,
using a record of social survey taken in Basildon New Town, Essex,
a representative of the newly-designated suburban estates in the 1940s.
Considering three aspects of housewives' living — women's working, shopping and leisure
– in the new town, this paper suggests the variety of the new town lifestyles and,
at the same time, a limited scope of activities of housewives with infants.
Their complaints showed a few defects of the physical environment of new towns,
but the problem was exaggerated by the biased composition of residents — many young mothers among residents.
pp.260-270
“Structural Changes of US Economy in 1920s and the Great Depression
—A Survey—”
Tokuo Iwaisako (Institute of Economic Research, Hitotsubashi University)
This paper surveys recent literature in economic history that emphasize various structural problems
in the interwar period as the causes of the Great Depression.
First, we discuss the analyses, most notably by Olney, on the structural increase in consumption expenditure
on durable goods and associated increase of household in-debtness during the 1920s in the U.S.
Such a structural change in household balance sheets might have deepened the decline of consumption
in the early stage of the Great Depression, 1930-1933.
Second, we summarize the studies on institutional changes of the US financial system from late 19the century to the 1920s.
Structural change in the financial system was one of the main causes of disintermediation in the interwar period.
Disintermediation and the absence of appropriate regulatory changes in the banking sector
had weakened the US banking sector in the interwar period and eventually resulted in banking crises in early 1930s.
Such studies about the interwar U.S. economy that emphasize structural problems will provide
important hints for our analyses of the prolonged Japanese economic slump in 1990s.
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| Vol. 57, No. 4 2006 |
pp.289-302
“Market Valuation of Political Power:
—Evidence from Politically Connected Firms in Thailand—”
Pramuan Bunkanwanicha (ESCP-EAP European School of Management),
Yupana Wiwattanakantang (Institute of Economic Research, Hitotsubashi University)
We analyze the outcomes when a handful of business tycoons became the country leaders as premier and cabinet members.
The first nomination of the Thai Premier in 2001 allows us to identify such an event.
The event study shows that immediately after the tycoons won the general election,
the stock market recognized the value of the firms owned by tycoons-cum-leaders.
Stock prices continued drifting upward in the following two years.
Overall, the results indicate that political power is value enhancing to connected firms.
Tycoons-cum-leaders have a political rent-seeking advantage to extend various economic favors to their firms.
pp.303-313
“The Effect of Governance Structure and CEO Characteristics on the Performance of Post-IPO Firms:
—Evidence from Young Firms in the 1960s—”
Hiroyuki Okamuro (Graduate School of Economics, Hitotsubashi University)
Previous studies on the corporate governance of Japanese firms concentrate on established large companies
in the period since 1975 and neglect the effects of CEO characteristics.
Using a unique dataset of IPO firms on the second section of the stock exchanges in the 1960s,
this paper examines the effects of ownership structure and CEO characteristics on the profitability of
emerging middle-sized firms in growing industries during the high-growth period in Japan.
The empirical results suggest that both CEO characteristics (age and shareholding) and bank relationships
were important success factors for the emerging firms in the 1960s.
pp.314-327
“Transforming the Incentive Mechanism in a Japanese Auto Dealership:
Empirical Analysis of Personnel and Employee Output Data”
Tsuyoshi Tsuru (Institute of Economic Research, Hitotsubashi University)
This paper examines the nature and the economic consequences of performance-oriented HR system
reform at a large Japanese auto dealership.
Company A, the auto dealer, changed its HR system in 2000.
The main objectives were to reduce the rigidity of personnel costs and to put more emphasis
on individual performance rather than seniority and experience.
Three major components of the reform were as follows:
(a) the company transformed the wage system from a skill-based to a job-based system;
(b) the company changed the commission system for the sales force from a linear compensation scheme
to one kinked around the “draw” line;
and (c) the company modified the performance rating system from conducting an overall evaluation of
each employee's ability and performance to focusing on utilizing evaluations of individual performance.
Econometric analysis of the personnel data has revealed the following points.
First, following the reform, wage differentials increased for employees under forty years of age.
Second, productivity effects amounted to a 24-percent increase in new car sales and a 12-percent increase in used car sales.
Third, the reform had a stronger motivating effect on the new car sales force,
while it had little motivating effect on the used car staff.
Fourth, the new performance rating system strongly tended to generate improved results
for most employees in lower-level job ranges while lowering results for poorly performing employees
in higher-level job ranges, thus reducing wage rigidity for higher-paid staff.
These findings indicate that Company A's new HR system has been effective in motivating and stimulating greater effort
by the new sales force, However, the productivity effect is not clear for the used car staff,
and the higher draw line has negative effects on sales volume.
Therefore, while A's transformation has proved partially successful,
it has been accompanied by unintended side effects.
pp.328-343
“Intrahousehold Resource Allocation, Child Labor, and School Enrollment:
—Evidence from Rural India—”
Nobuhiko Fuwa (Graduate School of Science and Technology, Chiba University),
Seiro Ito (Development Studies Center, The Institute of Developing Economies, JETRO),
Kensuke Kubo (Development Studies Center, The Institute of Developing Economies, JETRO),
Takashi Kurosaki (Institute of Economic Research, Hitotsubashi University),
Yasuyuki Sawada (Graduate School of Economics, Faculty of Economics, The University of Tokyo)
This paper empirically analyzes the determinants of child labor and school enrollment in rural Andhra Pradesh, India,
using detailed time-use data, information to judge whether the household is under a binding credit constraint,
and information on extra-household linkages covering pre-marital and parental generation.
We derive empirical models from a theoretical framework of intrahousehold resource allocation and apply them to this dataset.
The regression results from all empirical models support collective household models against unitary models.
The empirical results based on a conditional labor supply approach show that when a mother works outside,
her domestic labor is more likely to be replaced by daughters than by sons, but the sex contrast in market work
by children is not affected much, resulting in a higher burden on daughters.
The estimation results based on an endogenous switching model show that access to credit is
a major determinant of the child’s time use: children of credit-constrained households spend
less hours in school and for leisure but spend more hours working in the house.
pp.344-357
“An Econometric Analysis of the Uninsured in the Japanese National Pension
and the National Health Insurance Systems”
Michio Yuda (Graduate Student of Economics, Hitotsubashi University and Research Fellow of the Japan Society for the Promotion of Science)
The presence of uninsured in the Japanese social insurances system will cause their own financial deterioration
and problems for the entire Japanese social security system.
I analyze the characteristics of those uninsured by the Japanese National Pension and
National Health Insurance systems in terms of both the participation and the uninsured duration.
The main results of the empirical analysis using individual data from the
“Japanese Panel Survey of Consumers”, are as follows.
Firstly, the increase of the premiums does not affect the uninsured duration
but does affect participation in both social insurance systems.
Secondly, participating in the one social insurance system is not affected by participating in the other one.
Thirdly, those who have the private insurances tend not to be among the uninsured.
Moreover, the high uninsured rate among youths in the National Pension is not due to the gaps of the benefits
and costs in generations but due to their young age.
pp.358-371
“Optimal Monetary Policy in a Liquidity Trap: A Survey”
Tamon Takamura (Graduate Student of Economics, Hitotsubashi University),
Tsutomu Watanabe (Institute of Economic Research, Hitotsubashi University)
This paper overviews recent studies on optimal monetary policy in a liquidity trap, starting from Krugman (1998).
First, we point out that these studies focus on a phenomenon in which short-term,
rather than long-term, nominal interest rates face the zero bound constraint,
which is quite different from the original definition provided by Keynes.
In this sense, recent studies focus on a temporary, rather than permanent, liquidity trap.
Second, somewhat surprisingly, policy prescriptions to the temporary trap proposed
by the recent studies are very close to the standard one in light of the modern theory of optimal monetary policy.
Specifically, as shown by many studies, the optimal monetary policy rule in a liquidity trap
could be expressed as versions of inflation or price-level targeting.
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