Corporate Restructuring in Japan Part I: Can M‐Form Organization Manage Diverse Businesses?

The purpose of this paper is to examine the recent organizational restructuring in Japan in the framework of organizational economics, assuming that the product/market portfolio of the firm is fixed. How does a firm set about organizing its internal divisions? I first summarize some stylized facts on corporate diversification strategy and multi‐divisional (M‐form) organization in large Japanese firms from different perspectives. I then analyse the problem of choosing an organizational form. In particular, I argue that, precisely because of its related diversification, the multi‐business Japanese firm adopting the M‐form finds it difficult to differentiate its diverse businesses internally.     

Defect Detection Using Unanimous Vote Among Mahalanobis Classifiers for Each Color Component

In manufacturing industries, product inspection is automated and the use of image data is increasingly being employed for defect detection. A manufacturing company in Japan produces an item and inspects the produced products using image data. Reducing the error rate is important in product inspection because poor inspection of products might lead to the delivery of defective products to consumers (consumer’s risk) and strict inspection increases production cost (producer’s risk). To reduce the error rate, we highlighted fault points using a two-dimensional moving range filter and discriminated defect production through a unanimous vote among Mahalanobis classifiers for each color component. For results, we achieved a lower error rate than the current system. This research is an empirical study of how to use image data in defect detection.     

Long-term effects of labor market conditions on family formation for Japanese youth

This study aims to examine how each cohort’s family formation is affected by labor market conditions experienced in youth in Japan. Although the deterioration in youth employment opportunities has often been blamed for Japan’s declining fertility rate, the effect of slack labor market conditions on fertility is theoretically unclear. We estimate the effects of regional labor market conditions at entry to the labor market and contemporaneous conditions on fertility, controlling for nation-wide year effects and prefecture fixed effects, and find the following. First, high school-educated women who experienced a recession while entering the labor market are less likely to have children. In contrast, a recession rather increases fertility among college-educated women. When summed up, the aggregate impact of labor market conditions experienced in youth on fertility is weak. Second, the unemployment rate at entry to the labor market is positively correlated with the probability of having two or more children conditionally on having at least one child. Third, the contemporaneous unemployment rate is negatively correlated with marriage of women in the local labor market, although the correlation is weak and concentrated on the less educated group.     

A Note on the 'Invariance of Market Innovation to the Number of Firms'*

This note disputes the claim by Sah and Stiglitz ( Rand Journal of Economics , 1987, pp.  98–108) that their strong invariance result holds in a wide range of situations.     

Urbanization,informal sector,and development

Urbanization is a universal phenomenon in the postwar world, but its qualitative nature is varied across countries. Some nations have experienced urbanization that accompanied skill upgrading, industrialization, and the expansion of the urban formal (modern) sector, but others urbanized without such modernization and underwent the expansion of the urban informal (traditional) sector simultaneously. The question that naturally arises is what are the underlying causes for the differences. The purpose of the paper is to tackle this question analytically based on a dynamic model of urbanization and development.     

Real exchange rate dynamics revisited: A case with financial market imperfections

In this paper, we investigate the relationship between real exchange rate dynamics and financial market imperfections. For this purpose, we first construct a New Open Economy Macroeconomics (NOEM) model that incorporates staggered loan contracts as a simple form of the financial market imperfections. Our model with such a financial market friction replicates persistent, volatile, and realistic hump-shaped responses of real exchange rates, which have been thought very difficult to materialize in standard NOEM models. Remarkably, these realistic responses can materialize even with both supply and demand shocks, such as cost-push, loan rate, and monetary policy shocks. This implies that the financial market development is a key element for understanding real exchange rate dynamics.     

Credit spread and monetary policy

We show that the spread-adjusted Taylor rule including a response to the credit spread is a theoretically optimal monetary policy under heterogeneous loan contracts. However, the optimal response to the credit spread is ambiguous, given the financial market structure.     

Monopoly,product differentiation and economic welfare

This paper discusses the pricing behavior of a monopolistic producer supplying several quality-differentiated goods by using a model of a Lancasterian characteristic approach with consumer's taste pattern dispersed. It examines how finer product differentiation, which is made by the producer by means of the introduction of a new good, changes the price structure and consumer's welfare. It will be establised that the entry of a new good imposes quite different impacts on the price of the goods of higher quality and on those of lower-quality goods.