Fiscal Spending,Relative‐Price Dynamics,and Welfare in a World Economy*

This paper analyzes the dynamics of a 2 × 2 × 2 Heckscher–Ohlin model where foreign asset holdings and capital accumulation are independently determined by optimizing agents. Each country has two production sectors, both of whose products are used for consumption, and an investment sector, which uses one of the two commodities to accumulate real capital. In this setting we examine the effects of fiscal spending on the equilibrium paths of interest rates and prices and each country's lifetime utility. The welfare effect is found to consist of the static terms‐of‐trade effect, the dynamic foreign asset effect and the direct income‐loss effect.     

Do norms of decision-making styles,organizational design and management affect performance of Japanese firms? an exploratory study of medium and large firms

The success and resilience of Japanese firms have led many scholars and practitioners to theorize and speculate about the impact of what they have termed the 'Japanese management style' upon performance. There have been few studies that have attempted to explore empirically the links between the way Japanese firms organize, manage and decide, and their performance. This paper investigates the association between norms of decision-making style, organizational design and management, and some measures of firm performance. The empirical pattern of norms was assessed on the basis of responses of a random sample (N = 349) of Japanese managers. The study demonstrates that while there appears to be no support for the proposition that certain norms universally affect performance, in some sectors the impacts of norms on decision-making style, organizational design and management may be significant. The study concludes with the implications for theory building of this empirical exploration.     

Welfare effects of bubbles in an endogenous growth model

This paper examines welfare effects of asset bubbles in an endogenous growth model with overlapping generations. In our model, a steady-state equilibrium with bubbles exists only if the presence of bubbles raises the welfare level of the initial generation. Bubbles can be beneficial to generations born at relatively early dates, whereas they reduce the welfare level of sufficiently distant future generations. Increasing the rate of supply of the useless asset improves the lifetime utilities of future generations.     

Strategy transformation through strategic innovation capability – a case study of Fanuc

This paper presents a theoretical framework under which large companies should be able to bring about strategy transformation. First, we present the concept of ‘strategic innovation capability’, a corporate system capability to achieve corporate strategy transformation by strategic innovation. Then, we consider strategic innovation capability by comparing it with previous theories (dynamic capability, major innovation, dynamic capability, breakthrough innovation capability). Second, we present the case example of strategy transformation at Fanuc, a company that holds the top global share in the numerical control (NC) market. In this case study research, we consider and analyze historically how the company aimed for new creativity in the NC market, developed innovative NC technology for the machine tool market, and used that technology energetically for commercialized products. From the strategic innovation capability framework, the core theory of this paper, we also analyze and consider how top management made conscious efforts to form a new development organization within the company, and the processes involved in achieving strategy transformation to establish competitive superiority in this field. Finally, we discuss the implications drawn from this case analysis, and the issues for future research.     

A Comparison of American and Japanese Work Practices: Skill Formation, Communications, and Conflict Resolution

This article examines whether American work practices are becoming more similar to Japanese work practices with regard to skill formation, communications, and conflict resolution. I find that separated skills, self-managing teams, and the dual conflict settlement procedure prevalent in three American unionized plants contrast with the practices found in three Japanese unionized plants, where integrated skills, middle-up-down decision making led by assistant and first-line supervisors, and an informal and one-channel conflict settlement procedure are used.     

Defense and Welfare Under Rivalry

Two small countries facing a constant probability of war with each other import arms for consumption goods from the rest of the world. The defense good, produced by combining arms and army, is a public good. The reaction curve depicting the optimal supply of the defense good turns out to be backward-bending. Nevertheless, at least one of the reaction curves is positively sloped at the unique Nash equilibrium. Several comparative statics results are derived. For example, if one country's reaction curve is negatively sloped, military aid to the rival leads to a decline in its optimal supply of the defense good.     

Long‐run Specialization*

Constructing a dynamic Heckscher–Ohlin model, we examine long‐run specialization patterns in the presence of international technological differences. Even a slight difference in technology causes at least one country to specialize. Either the case of perfect specialization in both countries or the case of perfect specialization in one country and imperfect specialization in the other occurs, depending on the subjective discount rate, relative preference for two commodities, labor endowments, and technological conditions. A necessary and sufficient condition for each case to hold is provided. Structural differences between the Ricardian model and ours are also emphasized.     

Determinants of smallholder farmers' participation in banana markets in Central Africa: the role of transaction costs

A bivariate probit model was employed to jointly and separately estimate banana market participation decisions of buying and selling households in Rwanda and Burundi using household survey data. Selectivity bias was corrected for estimating the transacted volumes using Heckman's procedure. The results showed that transaction cost‐related factors such as geographical location of households, market information sources, and travel time to the nearest urban center influence market participation. Non‐price‐related factors such as security of land tenure, labor availability, off‐farm income, gender of the household head, and years of farming experience had a significant influence on the transacted volumes. Output prices had a significant correlation with sales volume, indicating price incentives increased supply by sellers. Generally, the findings suggest that policies aimed at investments in rural road infrastructure, market information systems, collective marketing, and value addition of banana products may provide a potential avenue for mitigating transaction costs and enhancing market participation and production of marketed surplus by rural households.     

When economics harmonized mathematics in Japan: a history of stability analysis

This article discusses how economics was mathematized by Japanese theoretical economists with the cooperation of Japanese mathematicians before 1950. Mathematicians played the leading part in assimilating European scientific ideas and providing an internationally oriented attitude in Japan from the mid nineteenth century. They began to publish many updated textbooks in Japanese from around 1930 on. In the 1940s, Japanese mathematical economists were intensively studying the so-called stability problem, thereby mathematizing economics more rapidly than ever before. Their research activity will give us an interesting example of a process of organizing economic knowledge by introducing more mathematics into the economics literature.     

Job transfers and job-bid systems in restructuring Japanese and American firms

When Japanese firms restructured their operations in the 1990s, Japanese employees were not fired and were often transferred together in groups inside firms or to related outside firms. Undergoing similar business restructuring from the late 1980s on, American firms fired low-performing white-collar employees, and excess midoodle-performing white-collar employees were fired if they could not locate other jobs in the firms by using 'job-bid' systems (systems that identifyopenings and allow individuals at their own choosing to 'bid' for those openings). American unionized blue-collar workers were laid off based on seniority rules. Although similar job-bid systems were introduced into Japanese firms in the 1990s, they were used only for certain white-collar jobs. In the United States, job-bid systems commonly were used for both blue- and white-collar employees. Overall, the Japanese employment system was characterized by management control and stable employment in contrast to the active role played by individual choice in an environment of unstable employment in the United States.