Japan and the World Economy最新文献

This paper examines the response of Japanese regional banks to the quantitative easing operations conducted by the Bank of Japan (BOJ) using semiannual bank-level data from 2001 to 2020. Many regional banks predominantly focus on lending business in their local areas so that, unlike some previous literature, we control for the local economic conditions. We found that, compared with the pre-QQE period, the BOJ’s government bond purchase has a remarkably greater impact on regional bank’s lending after the introduction of QQE. These results suggest that the QQE policy is quite effective in promoting bank lending. Regarding the differences in bank characteristics, the magnitude of impact is larger for regional banks with a higher NPL ratio, a larger asset size, and a lower market share. The first result is consistent with the findings of Bowman et al. (2015) and Matousek et al. (2019), whereas the second and third results are novel. The Granger causality tests produce consistent results.

Measuring the labor share is not an easy task. Labor share movements often vary depending on both their definition and the measurement scope. This study estimates the labor share in Japan based on two representative government statistical sources—the National Accounts and the “Financial Statements Statistics of Corporations by Industry” —with their differences in coverage and accounting standards corrected. We confirmed a clear downward trend in Japan’s labor share since the 1990 s, both in the total Japanese economy and in the corporate sector. The driving force behind the labor share decline is the significant decrease in the income of the self-employed (mixed income) and in the salaries and bonuses awarded to executives who are owners of small- and medium-sized enterprises (SMEs). This decrease is attributed to the decline in the number of self-employed individuals and SMEs. By contrast, salaries and bonuses to employees hardly contributed to the decline. These findings suggest that the straightforward narrative that—technological progress, globalization such as the transfer of production overseas, and the expansion of non-regular employment have reduced labor income to employees, thus resulting in a lower labor share—does not directly apply to the Japanese economy. Understanding the mechanism of the decline in Japan’s labor share requires identifying the causes and effects of the decline in the numbers of self-employed individuals and SMEs.

I revisit the excess volatility of the consumption puzzle, a feature often observed in developing and emerging economies. I assess how the excess volatility of consumption varies across countries by incorporating interrelation between countries’ commodity dependence and income level. This is estimated in the context of the excess sensitivity of the consumption to output using cross-country panel data. I find that the sensitivity of consumption on the income level appears differently by the country’s commodity dependence. The sensitivity is higher in low-income groups for the commodity-dependent countries, whereas the opposite pattern is observed for non-commodity-dependent countries.

This study explores the role of storage systems in reducing the variability of renewable power, focusing on pumped hydropower storage (PHS) systems. We regress the hourly storage by PHS on the hourly solar power generation to estimate the average amount of solar power generation stored by PHS systems. We adopt an instrumental variable approach to mitigate any endogeneity concerns, in which a weighted sunshine duration serves as the instrument for solar power generation. Our estimation results show that PHS systems alleviate the intermittency of solar power generation: an additional 1 MWh of solar power generation corresponds to an additional 0.249 MWh of storage by PHS systems. The relationship between PHS and solar power is more pronounced when the demand is relatively low and solar power generation is large. Inter-regional transmission grids also respond to an increase in solar power generation but to a lesser extent than PHS systems. Based on the estimated coefficients in the empirical analysis, we quantified the value of the existing PHS systems as storage systems that mitigated intermittent solar power generation. The estimated social benefit of avoiding curtailment is 180–280 million yen for a 10 MW scale plant, accounting for 7.7–11.7% of the cost of constructing a new PHS system. The result highlights the importance of effectively utilizing the current PHS capacity.

Feed-in tariff (FIT) is an important worldwide initiative to encourage renewable electricity technologies. Under the Japanese FIT system, households with solar panels decide the amount of both self-consumption and sales to the power company. By analyzing the household self-consumption and sales behaviors of solar-generated electricity obtained from the Ministry of the Environment of Japan, we examine (1) whether the rate of increase in electricity sales by households is higher or lower than the rate of increase in solar power generation and (2) whether self-consumption and sales behaviors of solar-generated electricity differ among households with different sales prices. The results show that the rate of increase in electricity sales is lower than that in solar electricity generation. This suggests that households increase their self-consumption as solar power generation increases. However, as the rate of increase in self-consumption is relatively low, solar-generated electricity is considered as a necessary good. Furthermore, we find that higher sales prices induce households to reduce their self-consumption and increase solar electricity sales to power companies.

We examined the accuracy of prediction of Canada, Japan, United Kingdom, and United States from the viewpoint of forecast errors. Compared with the forecast error of each country at the around same time, the forecast error of Japan is about 2 times larger. In case of Japan, even immediately before release of quarterly GDP, the forecast error is over 1 %, which is the same level of forecast error as 94 days before in the United States and 135 days before in Canada.

Evaluating the characteristics of forecast errors, it can be pointed out that Japan's forecasts are as efficient as those of other countries, and the addition of major economic statistics is unlikely to improve forecast errors. The reason for Japan's large forecast errors is the fluctuations in the GDP growth rate. These results provide evidence that volatile GDP may make the outlook worse.

Large fluctuations in Japan's quarterly GDP have already been pointed out. It is necessary to examine the factors behind the large fluctuations in the rate of change in Japan's quarterly GDP.

Commodity prices provide useful information about current and future global economic activity. First, we show that overall commodity prices indeed tend to comove with economic activity. Second, we try to extract the global demand factor(s) using many commodity prices. While commodity prices reflect both demand and supply factors, by relying on a wide variety of commodity prices, supply shocks can be filtered out as they tend to be commodity-specific idiosyncratic shocks except for widespread supply disruptions confined to a few historical periods. In this paper, we then show that factors extracted from commodity prices movement contain useful information to nowcast and forecast global GDP and industrial production.

We examine management innovation of family and non-family firms after CEO successions by using data of small- and medium-sized enterprises (SMEs) in Japan. Consistent with predictions based on the resource-based view and agency theory, we find that family firms managed by non-family professional CEO successors are less innovative than those managed by family CEO successors or non-family firms. Further analyses indicate that limited access to family-based resources is a key determinant of the conservativeness of professional CEO successors. Our findings suggest the importance of the congruence of ownership and management in family firms due to CEOs’ access to family-based resources.

We review long-term changes in “zombie firms” in Japan over this half-century using listed firm data with a framework in which the concept of “zombie firms” includes possible efficient bailouts. The first wave of zombie firms occurred during the period of main banks (hereinafter MBs). MBs were able to actively choose which firms would receive bailouts at the time. However, commonly held beliefs about MBs’ monitoring power and the special role of corporate groups and long-term credit banks for bailouts are not supported. In the largest wave of the lost decade, we find the zombie firm problem in the manufacturing sector was just as serious as the non-manufacturing in terms of firm count. Moreover, the pathological phenomena such as unwilling concentration of loans to MBs were also rather typical in the manufacturing. Soft budget constraints have continued in the manufacturing even after the resolution of banks’ non-performing loans since the bubble burst came to an end, leading to the manufacturing-centered third wave of zombie firms following the Global Financial Crisis.

Digital technology such as virtual meetings is key to communication and collaboration. However, a firm-level survey in Japan during the COVID-19 pandemic shows that foreign firms regarded digital communication as a key business obstacle. This paper estimates the determinants of the likelihood that foreign firms regard digital communication as an obstacle. The results show that digital communication is hindered by language differences, employees’ nationality differences, employment size, and time differences from foreign headquarters. Contrary to common assertions, digital communication is regarded as an obstacle in remote-work feasible sectors, but not so in in-person service sectors. Thus, digital communication does not completely eliminate barriers to face-to-face communication.