Japan and the World Economy最新文献

This study examines the market responses to announcements of stocks with different trading activities that disclose earnings during and outside normal trading hours. For less actively traded stocks, when bad news is reported after the market closes, potential informed trading exists, along with heightened return reversals and market inefficiency before the release. These informed trading activities are partially responsible for the post-announcement preopening price adjustments. Although the after-release preopening period for inactive stocks does not significantly facilitate price discovery as much as for active stocks, it provides an environment to resolve order imbalances after overnight information.

The EU plans to introduce a carbon border adjustment mechanism (CBAM) to curb carbon leakage and to protect energy-intensive and trade-exposed (EITE) industries. This move by the EU to introduce CBAMs has raised concerns in Japan that it will harm Japanese industry and the Japanese economy. To address these concerns, this study tries to provide an ex ante and quantitative analysis of the economic and environmental effects of the introduction of the EU CBAM. To capture the effects of the EU CBAM, this study employs a global multiregional, multisector computable general equilibrium model with 18 sectors and 17 regions. The main insights obtained from the analysis are as follows. First, we find that the introduction of the EU CBAM significantly reduces carbon leakage from the EU. Second, the effects of the introduction of CBAMs on the GDP and welfare of each country vary from country to country, but the effects are generally very small. While there is a positive impact on GDP and welfare in Japan, the magnitude of the impact is very small. There will also be a negative impact on Japan’s EITE industries, but the magnitude of this impact is very small and not of great concern.

To promote renewable energy deployment, Japan introduced a feed-in tariff policy in 2012, financed through a surcharge on electricity prices for consumers. The Japanese government also offered a discount system for electricity-intensive industrial plants, exempting them from paying full surcharges. Using monthly plant-level data from 2005 to 2018, this study evaluated the exemption system’s impact on electricity and fossil fuel consumption for plants in the iron and steel, chemical products, and pulp and paper sectors. Our results show that the exempted iron and steel plants decreased electricity purchase and consumption 18.62% and 17.88% after 2017, respectively. This decrease is attributed to the introduction of an electricity efficiency after 2017. It is worth noting, however, that the revision of the scheme did not affect the chemical, pulp and paper sectors. In this sense, a stronger efficiency requirement might be warranted to ensure the decrease in electricity consumption for all sectors. Nevertheless, we estimate that roughly 7 million tCO₂ have been avoided thanks to the decrease in electricity consumption in the iron and steel sector.

This study examines the impact of a monetary policy by the Bank of Japan on households’ willingness to borrow, that was announced on October 31, 2014. This policy, known as Kuroda Bazooka, was not anticipated by the private sector; therefore, it could be regarded as an exogenous shock. To estimate the effects of the Kuroda Bazooka, this study used interrupted time series analysis, a technique often used in medicine, but not yet widely used in economics. The analysis of the data before and after the shock shows that the Kuroda Bazooka increased household borrowing intentions by approximately 10 %. This result suggests that although there was not much change in households’ aggregate borrowing, there was a change in their intention to borrow. Therefore, a monetary policy that merely changes expectations may not be effective.

We synthetically assess the three major transmission channels of international business cycles: bilateral trade, foreign direct investment (FDI), and portfolio investment flows between countries, while considering country-time heterogeneity with multiple fixed effects. Using the data of 65 countries during 2004–2019, we find that real and financial integration generates heterogeneous impacts on business cycle comovement. Trade integration, particularly through intermediate input trade, drives business cycle synchronization, and its impact has been more pronounced after the global financial crisis. This may be due to deepening intra-industry trade and dense global value chains. We also find greenfield FDI leads to business cycle synchronization when considering its time-lags. Higher short-term debt market integration is also associated with more synchronized business cycle comovement, implying that balance sheet effects and the related credit cycle can exert influence on business cycle comovement.

This study examines the effects of performance feedback on sales growth relative to social and historical aspirations on corporate merger and acquisition (M&A) decisions and M&A performance. A sample of 924 M&A deals announced by Chinese manufacturing firms between January 2006 and June 2022 is analyzed using logistic regression and multiple linear regression. Robustness tests are also conducted to show that the main results are consistent. We find that (1) negative performance feedback relative to social aspiration motivates acquirers to undertake more risk in M&A-related decisions such as choosing overseas targets and using non-deferred payments in deal structure; while negative historical performance feedback significantly encourages acquirers to choose deferred deal structure. Positive performance feedback does not have a significant impact on acquirers’ choices; (2) In terms of M&A performance, both negative and positive performance feedback relative to social aspiration can have a positive effect on M&A performance; while historical performance feedback cannot affect M&A performance. This paper addresses the heterogeneity of the effects of performance feedback (which is divided into historical and social performance feedback) on firm behavior and contributes to the Behavioral Theory of Firms and Stewardship theory.

Although the impact of corporate social responsibility (CSR) on business and market performance has been getting attention in China, its influence on innovation outcomes has not been fully investigated. This study utilises patent information and CSR measurements from Orbis and Refinitiv, respectively, and empirically investigates the determinants of corporate innovation, focusing specifically on the influence of CSR. We find a positive relationship between CSR and innovation outcomes, namely patent applications and patents granted, which are also found in developed countries. Furthermore, our findings provide new insights into inconclusive factors such as the impact of Chinese economic policies or government ties on innovation performance. In particular, we find that government-owned firms no longer have a relative advantage in innovation.

This paper develops a semi-structural model to estimate the impact of demographic changes on the natural rate of interest in Japan. We find that demographic changes have a significantly negative impact on the natural rate by lowering the trend potential growth. We also find that the negative impact has increased over time amid stronger demographic headwinds. A lower natural rate of interest could challenge the Bank of Japan’s efforts to reflate the economy. These findings call for measures to boost Japan’s potential growth to offset the negative demographic impact and lift the natural rate of interest.

In this study, I estimate the degree of competition in the Japanese loan market using a new empirical industrial organization method. With it, I conduct a long-term analysis of more than 40 years that includes the effect of financial deregulation prior to 2000. The model adopts an appropriate identification strategy in the estimation by introducing a rotation term to the demand function. This study also has an examination of the mechanism behind the long-term development of competition to test the validity of two hypotheses: the efficient structure hypothesis and the market power hypothesis. The findings are as follows: (1) The Japanese loan market was the least competitive around 1980, and competition has intensified since then. (2) After 2000, competition has generally increased, especially among large city banks with a nationwide presence. (3) The correlation analyses between market concentration, degree of competition, and cost efficiency indicate that the results are consistent with the efficient structure hypothesis except for the period around 2000. In contrast, the results are consistent with the market power hypothesis in the 1990s, but become inconsistent thereafter.

We investigate the distributional and welfare impacts when commercial and industrial (C&I) electricity end users face a dynamic pricing structure as opposed to a constant volumetric price with demand charge on individual users’ peak usage. While demand charge does not necessarily reduce the system-wide peak, it often constitutes a large share of C&I users’ payments. Hourly electricity consumption data for C&I users on O‘ahu, Hawai‘i, reveal that the fixed cost recovery associated with removing demand charge has both significant distributional impacts and considerable efficiency gains. Moreover, the rate reform can be regressive or progressive depending on how the fixed charge is allocated across users.