WHO BENEFITS FROM CORRODING KEIRETSU?

Abstract. Observations on Japan's industrial distribution system reveal that many producers maintain both keiretsu and non‐keiretsu channels. An intriguing question then is: what economic rationale underlies such an ambivalent policy? This motivated us to present a model of an incomplete keiretsu system. We find that the collapse of a keiretsu is not necessarily a misfortune for the firms remaining therein: they can turn the situation to their advantage if a keiretsu collapses partially. We show why some firms leave their keiretsu while others remain with it, and determine who the winners are.     

Agricultural Productivity Growth and Household Food Security Improvement in Nepal

Nepal is one of the poorest countries in the world. Using the panel data of the Nepal Living Standard Measurement Survey (NLSS), the poverty rate in 1995–96 was estimated to be about 40%, while in 2003–04 it was estimated at roughly 30%. Political instability has prevented the development of industry and threatened the food security of poor people, but scholarship on the factors contributing to food security is incomplete; while the determinants of food security have been mentioned in past research, prior studies have analyzed cross‐sectional data and thus could not have omitted heterogeneity bias. This paper analyzes the change in agricultural productivity in real terms and the impact on household food security by using the panel data of NLSS in 1995–96 and 2003–04. This analysis reveals that growth is observed in real agricultural productivity in spite of land segmentation; the growth in agricultural productivity in real terms has a positive impact on household food security; and the lower a farmer's income becomes, the more positive its impact on food security. Therefore, advancements in agricultural productivity play a critical role in promoting food security at the individual and household levels.     

PARTIAL PRIVATIZATION UNDER ASYMMETRIC MULTI‐MARKET COMPETITION

Under the assumption that a public firm provides goods or services to two markets and that a private firm provides goods or services to one market only, this study examines whether public firms should be privatized. It also investigates how the production quantity of a private firm changes when its degree of privatization increases. We find that when the market share of a duopoly market is large (small), partial privatization (nationalization) is socially preferable. We also find that the quantity produced by the private firm does not always increase along with the degree of privatization.     

Bowley Duopoly Under Vertical Relations

Compared to the well‐known oligopoly models such as those of Cournot, the so‐called Bowley duopoly is less known, and almost ignored in the literature. This neglect reflects the assumption that as a leader–leader model incorporating apparent excess rivalry it is presumably untenable, at least in theory. However, it is, in fact, observable in practice. Furthermore, the predicted excess competition is not only observable empirically but also accountable theoretically. We show how excess competition emerges when an upstream monopolist offers the downstream retailers a compensated game in which each acts as a leader. The outcome is not only stable but also benefits all involved actors, including consumers under vertically‐related markets, such as those presided over by a monopolist producer. This result of emergent stability shows that the Bowley duopoly should be considered alongside other oligopoly models.     

UNEMPLOYMENT, TRANS-BOUNDARY POLLUTION, AND ENVIRONMENTAL POLICY IN A DUALISTIC ECONOMY

This study is intended to examine the effects of environmental policies on employment, the use of polluting goods, and the unemployment rate under a model introducing trans-boundary pollution affecting the productivity of the other productive sectors. That model was designed by Copeland and Taylor (1999) , and transformed into a dualistic economy model constructed by Harris and Todaro (1970) . Results of our analyses show that enforcement of environmental policy through control of emissions taxes does not necessarily worsen urban unemployment. Therefore, we show that it is not usually proper to maintain that some environmental pollution cannot be avoided to establish economic development. Moreover, we analyze the effect of some environmental policies on social welfare and discuss the effectiveness of those policies.     

A statistical comparison of the short-term interest rate models for Japan,U.S., and Germany

We propose a simple and practical model selection method for continuous time models. We apply the method to several continuous time short-term interest rate models using discrete time series data of Japan, U.S. and Germany. All the models can be easily estimated from discrete observations, and their performances can be evaluated in a uniform statistical framework. The models that allow dependence of volatility on the level of interest rates tend to perform well empirically. The degree of volatility dependence on the interest rate levels seems to be different across the countries. For the German data, we observe that a model with nonlinear drift performs better than the best linear drift model.     

PROBING PARTIAL CHAINING UNDER SPATIAL COMPETITION IN VERTICAL MARKET STRUCTURE

This paper probes impacts of partial chaining upon the cost structures of not only the chained and independent distributors under spatial competition, but also the monopolistic producer who manages differentiated distribution channels for heterogeneous retailers simultaneously. We assume vertically related but decentralized markets in upstream and downstream stages. Upon chaining, market areas of each chained (independent) store increase (decrease), the related retail prices decline (rise) and profits increase (decrease). Chaining also tends to lower the wholesale prices for the chain stores generally. While aggregate consumer surplus increases, profit for the producer not even directly chained also increases. Social surplus increases with chaining at the expense, however , of not only the remaining independent stores and their customers, but also the chain store's own customers partly at the market periphery.     

Evaluating effects on the flow of electrical and electronic equipment and energy consumption due to alternative consumption patterns in China

In this paper, we evaluated the effects of consumer’s behavioural changes on usage and disposal of home appliances. With the model to estimate the product circulation, first we conducted the sensitivity analysis with the six parameters, namely urbanisation, household size, Gini coefficient, product lifetime and selection rate of used product and high energy efficiency product. Then, secondly we evaluated CO₂ emission and e-waste generation from four consumers’ different behavioural patterns, which are named as ‘Business As Usual’ (BAU), ‘Rapid Cycling’ (RC), ‘Chain of Users’ (CU) and ‘Quality and Wisdom’ (QW). As a result, the QW scenario was the best lifestyle in both criteria. Further, RC scenario had an advantage on the reduction in e-waste generation in one hand, but CU scenario reduced more CO₂ emission. During the transition era of China from materially poor to rich, it could be one of the solutions to utilise energy-efficient second-hand product to improve the living standards of the poor and replace technologically inferior product stocks in poor households.