Japan’s banking crisis: An event-study perspective

We calculate abnormal stock returns for Japanese non-financial companies around major events associated with the banking crisis (1995–2000), and find that not all companies were equally sensitive to the malaise of the banking sector: the most affected were small, leveraged, low-tech companies with low credit ratings and low market to book ratios. This is consistent with “credit crunch” theories (companies with limited access to financial markets are sensitive to changes in bank lending) and with claims that innovation is rarely financed by bank debt. We do not find much evidence on the alleged misallocation of loans to support ailing bank clients.     

External adjustments and coordinated exchange rate policy in Asia

In this paper, we estimate structural VAR models with contemporaneous restrictions based on neo-classical and Keynesian theories to investigate whether the cause of current account surpluses for East Asian economies is a “saving glut” or undervalued currencies. Analytical results show that the major determinant of the current account is the real effective exchange rate for all East Asian countries with the exception of China for which the major determinant is domestic GDP. Accordingly, the recently requested revaluation of the Chinese yuan may not be an effective policy for reducing the Chinese current account surplus, and may affect other Asian current accounts. We also investigate whether a Chinese currency revaluation would contribute to the improvement of current account imbalances in East Asia and find that a revaluation would, indeed, improve the current accounts of Japan, Korea, Indonesia, and Thailand. Since the trade structures of major East Asian countries are substitutes with that of China, a Chinese currency revaluation might not lead to a decrease in East Asian current account surpluses. Coordination of currency policy among East Asian countries is, therefore, needed to solve the global current account imbalance.     

The Hypothesis–Testing Ordering System: A New Competitive Weapon of Japanese Convenience Stores in a New Digital Era

This study focuses on the store–ordering system practiced by Japanese convenience stores. The article examines (1) the conceptual categorization of such ordering systems, (2) the history of the system development at three major convenience stores, and (3) the characteristics of 7–Eleven's development that led the way toward an innovative ordering system.     

What causes business cycles? Analysis of the Japanese industrial production data

We explore what causes business cycles by analyzing the Japanese industrial production data. The methods used are spectral analysis and factor analysis. Using the random matrix theory, we show that two largest eigenvalues are significant. Taking advantage of the information revealed by disaggregated data, we identify the first dominant factor as the aggregate demand, and the second factor as inventory adjustment. They cannot be reasonably interpreted as technological shocks. We also demonstrate that in terms of two dominant factors, shipments lead production by four months. Furthermore, out-of-sample test demonstrates that the model holds up even under the 2008–2009 recession. Because a fall of output during 2008–2009 was caused by an exogenous drop in exports, it provides another justification for identifying the first dominant factor as the aggregate demand. All the findings suggest that the major cause of business cycles is real demand shocks.     

Quantitative analysis of modularization in the automobile and PC industries

Much research has been done on modularizing the PC industry and automobile industry. In the analysis of the effect of modularization in the PC and automobile industries, however, very little of this research has been quantitative. In this paper, we use the number of patent applications for PC and automobile components to analyze the modularization in the PC and automobile industry. We calculated a ratio of the number of patents applied for by PC/automobile manufacturers vis-à-vis the total number of patent applications for the components, and used it to quantitatively judge whether PC/automobile manufacturers still hold the initiative with respect to R&D. The analysis indicates that PC manufacturers no longer hold the R&D initiative but that automobile manufacturers still do for engine control systems. On the other hand, it indicates that automobile manufacturers no longer hold the R&D initiative on the safety and communication control systems. The paper finally verifies the correlation between modularization and R&D initiative by means of regression analysis.     

Further analysis on leadership in tax competition: the role of capital ownership

This paper extends the work of Kempf and Rota-Graziosi (J. Pub. Econ. 94:768–776, 2010), which argues that under capital tax competition the sub-game perfect equilibria (SPEs) correspond to two Stackelberg outcomes. The findings show that the Kempf and Rota-Graziosi result depends on the form of capital ownership. By generalizing the form of capital ownership, this paper shows that the simultaneous-move outcome prevails as an SPE if the capital is owned by residents in the countries, whereas the Kempf and Rota-Graziosi argument holds if the capital is owned by nonresidents.     

Contagion of Self‐Interested Behavior: Evidence from Group Dictator Game Experiments

We examine how group decision‐making affects other‐regarding behavior in experimental dictator games. In particular, we assess whether the effects of iterated games differ for group and individual decision‐making and whether the difference in decision‐making style (individual or group) changes the perception of social identity. We make two findings on group decision‐making. First, group decisions become more selfish when repeating the game after changing group members. Second, a dictator group donates more to a recipient group at the same university than to a recipient group at a different university. These findings are not true for individual decision‐making.     

Inflation and public debt reversals in advanced economies

This paper quantitatively assesses the effects of inflation shocks on the public debt-to-GDP ratio in 19 advanced economies using simulation and estimation approaches. The simulations suggest that 1 percentage point shock to the inflation rate can reduce the debt-to-GDP ratio by about 0.7 percentage points on average across countries, while the estimated impulse responses are a little larger and more persistent. Additional assumptions taking into account financial repression do not necessarily make these effects substantially larger. These results imply that modestly higher inflation, even if accompanied by some financial repression, could reduce the public debt burden only marginally.