Japan and the World Economy最新文献

We survey the economics literature on dual-role platforms and self-preferencing by them. Existing studies mainly consist of theoretical studies, but there are also some empirical studies. Regardless of whether it is theoretical or empirical, many studies on self-preferencing are concerned with the manipulation of search results and recommendation algorithms. Some recent studies have examined first-party selling by platforms that use proprietary transaction data collected from third-party sellers. However, little has been explored about other types of self-preferencing. Findings reported in the existing literature indicate that the impact of self-preferencing on consumers depends largely on the forms of self-preferencing and market environments, implying that policymakers need to gather relevant information on a case-by-case basis for better decision-making. Finally, we discuss the types of data used in existing empirical studies, which suggest what kind of data and information can (not) be accessible by researchers. Several directions for future research are also proposed.

Since the end of the 1990 s, the sluggish growth of Japan’s gross domestic product (GDP) and the mired fiscal state of its public sector have provoked consternation about its public sector’s fiscal sustainability. Therefore, I estimated the fiscal reaction functions (stemming from Bohn, 1998a, 2008) with time-varying parameters for all Japan’s government sectors (for 1976Q2–2020Q1), i.e., the general government (GG), the central government (CG), the whole of the local governments (WLG), and the whole of the social security funds (WSSF), to chronologically assess their fiscal sustainability using four different models, including a least-squares with breakpoints model and a state-space model with the Kalman filter. My results demonstrate that (1) the least-squares with breakpoints model outperformed the others, and (2) although CG, WLG, and WSSF often sustainably managed their finances during the analysis term, GG has failed to implement a sustainable fiscal policy from the mid-1990 s (3) CG and WSSF adjusted their fiscal postures according to Japan’s economic state. Fiscal severity caused WLG to change its fiscal posture.

This study empirically examines the determinants of individuals’ attitudes about inward foreign direct investment (FDI) using responses from questionnaire surveys that were originally designed. Individuals’ preferences for inward FDI differ between greenfield investments and mergers and acquisitions (M&A), and people are more likely to have a negative attitude toward M&A than greenfield investments. People with a negative image of the so-called “vulture fund” for foreign capital tend to oppose inward FDI, and this is more pronounced for M&A than greenfield investments. Moreover, loss aversion and high time preference rates are strongly related to opposition to inward FDI, and people with such behavioral biases tend to refuse indigenous firms to be acquired by foreign capital, even if they agree to accept greenfield investment. These results indicate that people’s preferences for inward FDI depend more on non-economic attributes than economic attributes. Our results also suggest that a lack of economic literacy is associated with unconscious biases against accepting inward FDI.

Average fuel efficiency of vehicles improved substantially over the last three decades in Japan. Yet, the carbon emissions from on-road passenger vehicles continued to increase until 2000, and then turned to a steadily declining trend. We empirically investigate this disparity. To that end, we apply an analogue of the Copeland-Taylor decomposition, combined with an empirically estimated behavioral model of car ownership and utilization choice, to economically decompose vehicle carbon emissions into the scale, composition, and technique effects over our study period, 1990–2015. We find that exogenous demographic changes such as population size, driver’s license holdings, or labor migration across regions can only explain this disparity partially. After accounting for endogenous changes in household’s geographically-explicit transport demand by the estimated behavioral model, the predicted emissions match the time path of the observed emissions surprisingly well. Of all the factors in the behavioral model, the fuel cost per unit of driving accounts for the largest share of the total variation in the observed emissions. Our result indicates that 60% of the technique effect is offset by the perverse effect of induced transport demand due to the lower fuel cost. Importantly, the induced demand comes from both the intensive margin (driving) and the extensive margin (car ownership).

Using an overlapping generations model, we present analyses of public long-term care provision effects on fertility and time allocation decisions of sandwich caregivers, those caring for young children and old parents simultaneously. If the public long-term care level runs short of the necessary level, then working children must compensate for the difference by spending their time. Reportedly, about a third of university students’ parents are sandwich caregivers in Japan, although Japan has a Long-Term Care Insurance system, which is a mandatory system with universal coverage. With a rapidly aging population, demand for long-term care is predicted to increase, thereby affecting family time allocation, e.g., fertility decisions, in Japan. Results show that if public long-term care production is costly relative to family care provision, then increases in public care provision lower the fertility rate. If labor productivity in the public long-term care sector improves, then it increases the fertility rate by freeing caregivers’ time from family care provision. It will also increase social welfare. The effects on labor employment in the goods production sector are generally ambiguous because the increased public care provision requires more labor.

In response to a crisis, while retrenchments are considered to be an important part of a firm’s long-term recovery, research has indicated that downsizing strategies, reducing employment and shrinking the R&D budget, may lead to an erosion of a firm’s valuable core competence. Drawing from the literature of organizational turnaround strategies, this study advances the downsizing research by explaining how downsizing strategies affect a firm’s long-term performance. Using a uniquely compiled dataset of 2559 Taiwanese manufacturing firms, our research shows that increasing labor employment during a financial crisis can significantly improve a firm’s long-term total factor productivity and sales. In other words, employment downsizing may not be the best solution when encountering an economic downturn.

The effect of cross-border diversification on bank performance is part of the broader debate on how multinational banking and financial integration affect the global financial economy. Previous studies that examined this relationship present mixed results - namely that cross-border diversification improves bank performance but also increases bank risks that could lead to systemic failure. Even so, this line of debate has not been examined in the case of Japanese banks conducting international operations. The present study questions whether cross-border diversification improves the performance of Japanese banks and to what extent each cross-border expansion activity affects bank performance. The latter was largely ignored in previous studies. Our results show that cross-border diversification improves cost efficiency but decreases/harms the profit efficiency of the banks analyzed. In addition, we find that the expansion of foreign assets and foreign branch operations present funding risks and operational inefficiency. We offer two important recommendations. First, as a major player in international lending, the current expansion activities of Japanese banks require close monitoring and supervision to prevent systemic risk resulting from aggressive and risky overseas expansion activities. Second, the current expansion strategies of Japanese banks, especially the expansion of overseas assets and branch operations (retail banking), should be re-examined.

We incorporate sectoral job separation rates in a small open economy model to examine the Balassa-Samuelson (B-S) effect. Unequal separation rates give rise to compensating wage differentials. We simulate the model for Japan and replicate a feature of its economy that the nontradeables sector has higher wages and a higher separation rate compared to the tradeables sector. With productivity growth in the tradeables sector, labour moves from the tradeables sector to the nontradeables sector if tradeables and nontradeables are complements in consumption. The B-S effect is dampened. With a higher separation rate in the nontradeables sector, higher wages in the nontradeables sector amplifies this labour movement. Nevertheless, unemployment always falls due to a positive income effect. In contrast, the effect of productivity growth in the nontradeables sector is to lower the real exchange rate and raise unemployment.

In this paper, we examine the CPI (consumer price index) measurement errors under the first wave of the COVID-19 spread in Japan. To address this question, we construct high-frequency quality-adjusted price indices by employing daily scanner data from retail stores in Tokyo. We demonstrate the importance of using price data with the wide-ranging coverage of products and outlets by making explicit adjustments for temporary sales effects and retail service quality in examining the retail price dynamics under the COVID-19 pandemic as the voluntary lockdown constrained household purchasing behavior. Note that the sources of the CPI measurement errors under the COVID-19 pandemic differ significantly from those in the US, observed as wide-ranging and long-lasting stockouts. We show that downward bias, not upward bias generally advocated, was observed during the first wave of the COVID-19 spread in Japan. The magnitude of the downward bias is estimated at from $-0.6$ to $-0.3$ points on the CPI for food less perishables and eating out on the basis of cumulative changes from January 2020 to June. The contribution of the estimates to the overall CPI is $-0.3\text{\%}$ to $-0.15\text{\%}$ points on an annualized basis, considering that the estimation covers half-year and the weights are about a quarter of the overall CPI. The magnitude of measurement errors is deemed limited, and the overall trend of the CPI remains unchanged even after incorporating the estimated downward bias. It should be noted that this downward bias arises mainly from the “one-specification-for-one-item” policy by weakening the price representativeness in the Japanese CPI.

We examine how the COVID-19 contagion influences consumer expenditure patterns. We show that the consumption expenditure responses to the spread of the COVID-19 pandemic are significantly different between the older and younger generations. We find that older adults spend less than the younger generation by at least 5% during the pandemic. In fact, those aged above 60 significantly decrease their spending even on food and drink products by 13%. We also find that older adults forgo shopping in favor of the younger generation. These responses might be due to the fear of COVID-19 infection (Immordino et al., 2022).