Journal of the Japanese and International Economies最新文献

This paper examines to what extent self-employed households underreport their income to tax authorities in Japan. To this end, we employ the so-called expenditure-based approach, which essentially compares the current expenditure of self-employed and wage earner households while controlling for their income, net worth, and household characteristics. Using Japanese household-level panel data for the period 2009−2019, we find that the self-employed possibly underreport their income by 33.0–36.4%. Our findings are also robust to the different preferences (degree of risk-loving, time discount rates, etc.), planned retirement age, and degree of measurement error in expenditure between the self-employed and wage earners.

Using a survey of and financial data for Japanese small- and medium-enterprises (SMEs), this paper examines the determinants of firms’ use of the business support programs provided by the Japanese government during the COVID-19 pandemic and their effect. With respect to the determinants, we obtain the following three findings: First, firms were more likely to have obtained subsidized loans, grants, or subsidies the more their sales had fallen during the pandemic, suggesting that funds flowed to firms that were adversely affected by the pandemic. Second, the likelihood that firms obtained funds was higher if their credit scores were lower or if they were classified as “zombies” and/or “low-return borrowers” before the pandemic, suggesting that the government programs also helped firms that had been under-performing before the pandemic. Third, firms were more likely to receive funds if they had a stronger relationship with their main bank before, suggesting that bank relationships play an important role in firms’ access to government programs. Regarding the causal effects, we obtain the following three findings: First, except for the subsidies for employment adjustment, the support programs increased the cash holdings of user firms. Second, subsidized loans from private financial institutions lowered exit rates, while none of the programs had a significantly positive effect on employment relative to non-users (or in absolute terms). Third, the credit scores and profit-to-sales ratio of firms that used the support programs decreased and the likelihood of such firms being a zombie and/or a low-return borrower increased. Overall, our findings provide a cautionary tale in that the business support programs produced mixed results in that they may have prevented business failures but have also helped to prop up firms that are not viable in the long run.

This study addresses the issues of whether foreign firms outperform domestic firms in markups and whether the presence of foreign firms dampens the markup of their local counterparts in the Chinese market. Analysis of a firm-level panel dataset, we find foreign-invested enterprises (FIEs), particularly those not from Hong Kong–Macau–Taiwan, charging a higher markup. Estimations on the determinants of markups highlight the important roles played by technological capability and intangible assets. The potential channels and mechanisms are also discussed. Entering the Chinese market through joint ventures helps FIEs raise markups, and this effect is notable for HMT–FIEs, which might have a relative advantage of cultural proximity than other FIEs. Sharing equality with national capital to construct political connection (guanxi) also helps facilitate markups. Crucially, foreign presence is positively related to local firms’ markups, suggesting that the spillover and linkage effects dominate the competition pressure brought about by foreign direct investment.

Studies founded on Becker's theory of employers’ taste-based discrimination show that discrimination arises not from “taste” but from “prejudice,” “belief,” and “stereotype.” However whether the “employer” is the source of discrimination remains unanswered. Thus, survey research using employers as a sample is indispensable to address this issue. In this study, we use a unique data set that employers can identify to analyze whether their gender stereotypes are the source of gender discrimination. The analysis showed that employers' strong stereotypes reduced women's proportion in companies. Furthermore, when the employer is a woman, her stereotype strongly influences women's proportion.

For over two centuries, the municipal (muni) bond market has been a source of systemic risk, which returned early in the Covid-19 downturn when borrowing from securities markets became costly for many private and public entities, and some found it difficult to borrow at all. Indeed, just before the Fed announced its unprecedented intervention into the muni market, spreads of muni over Treasury yields rose in line with the unemployment rate and appeared headed to levels not seen since the Great Depression, when real municipal gross investment plunged 35 percent below 1929 levels. To prevent such a calamity, the Fed created the Municipal Liquidity Facility (MLF) to purchase newly issued, (near) investment-grade state and local government bonds at ratings-based interest rate spreads over the safe OIS benchmark yield. In general, these spreads were initially about 100 basis points above average spreads under more normal market conditions and were later lowered by 50 basis points in August 2020. Despite a modest take-up, our study documents the MLF prevented muni spreads from rising much above those margins (plus a modest 10 basis point fee) and limited the extent to which interest rate spreads could have amplified the impact of the Covid pandemic. To establish the MLF the Fed needed Treasury indemnification against default losses. There were concerns about whether the creation of the MLF could induce moral hazard among borrowers and could undermine the efficiency of the bond market if the facility had lasted too long. Partly for this reason and because the muni market had settled down by yearend 2020, the Treasury terminated the MLF at that time. Future assessments of these downside aspects will help answer the question whether the program's benefits addressed here exceeded its costs.

This study examines how credit lines affect corporate cash holdings and capital investment using a hand-collected data on publicly traded Japanese firms from 2006 to 2017. The study compares firms with and without credit lines to investigate the effects of credit lines. The empirical results are as follows: (1) Firms with credit lines hold smaller cash reserves than those without; (2) Firms with credit lines undertake more capital investment than those without; (3) The effects of credit lines are more amplified for financially constrained firms than their counterpart; (4) A close bank–firm relationship plays a positive role in the effect of credit lines on corporate activities.

These empirical findings indicate that credit lines can improve firms’ financial flexibility and allow them to use cash holdings held for precautionary reasons to invest. The results also show that credit lines and the attendant implicit bank–firm relationships are complementary to each other. Moreover, having both credit lines and a close bank–firm relationship is important to Japanese firms for their corporate activities. Furthermore, the results imply that the use of credit lines is still relatively undeveloped in Japan, which may be a reason for the country's large corporate savings and lackluster investment.

This study provides empirical evidence of the impact of labor market concentration on wages. We find that (1) wages are suppressed in more concentrated labor markets, (2) labor rigidity is associated with wage responsiveness to labor market concentration, (3) the impact of labor market concentration on wages is smaller for firms with more competitive downstream product markets, and (4) greater job opportunities outside the manufacturing sector weaken the relationship between concentration and wages. In sum, our findings indicate that labor rigidity and the degree of competition in downstream product markets, as well as outside options, affect the relationship between market concentration and wages.

This paper argues that aging of the workforce is an important factor causing the flattening of the age–wage profile of the Japanese economy that has been observed over the past two decades. Assuming imperfect substitution between older and younger workers, we derive the labor demand function from the firm’s optimization problem. We estimate the elasticity of substitution between different aged workers, and quantify the effect of aging on the age–wage profile. We find that aging of the workforce can explain more than 80% of the change in the age–wage profile from 2000 to 2019.

Recent literature reports a decrease in wage returns to skills since the 2000s. This paper contributes additional evidence that this trend is also occurring with skills that accumulate through job experience. We use micro data of Japanese workers to analyze this phenomenon by taking advantage of unique Japanese employment practices that emphasize skills acquired through tenure and on-the-job training as important human capital. We find that (1) wage returns to job experience have significantly decreased from the 2000s to the 2010s and (2) decomposing the human capital into general and firm-specific, the returns to the latter have decreased significantly.

This study estimates the policy impacts of the resumption of income thresholds for receiving child benefits (CB), in April 2012, on maternal labor market participation, childcare services use, and child health outcomes in Japan. Using data from the Longitudinal Survey of Newborns in the 21st Century and employing a regression discontinuity design, we found that the reduction of CB payments in higher-earning households, where the annual income of the household head exceeded their threshold, promoted intensive and extensive margins of maternal labor supply, especially for part-time workers and the self-employed. Furthermore, mothers returned to the workplace using non-accredited childcare and increasing the total childcare costs but having no impact on children's health outcomes. Heterogeneous effects were also observed in prefectures with low availability of accredited childcare; mothers incurring CB reduction used non-accredited childcare to start full-time employment. These findings imply that CB reduction had the advantage of encouraging maternal employment and, especially in prefectures with few childcare facilities, increasing the number of accredited childcare centers and that reducing the price of non-accredited childcare services can make it easier for mothers to return to the workforce after giving birth.