Bank risk and non-interest income activities in the Indonesian banking industry

The recent trend of product diversification in the Indonesian banking industry underscores the importance of non-interest income activities. This study examines the relationship between product diversification and bank risk over the period of 2002–2008. Our analysis shows clear evidence that the effect of product diversification on bank risk depends highly on the bank's asset size. Specifically, the degree of product diversification is negatively associated with bank risk for small-sized banks. Conversely, the degree of product diversification is positively related to bank risk for large-sized banks. This finding suggests that deregulation encouraging banks to become more involved in non-traditional activities may have an adverse effect on the overall banking system where large-sized banks are playing a significant role in Indonesia.     

CROSS‐BORDER INTEGRATION IN NORTHEAST ASIAN AIR TRANSPORT MARKET

This study highlights the recent global trends of the air transport market and develops a simulation model to assess the welfare impacts of tripartite liberalization in the Northeast Asian air transport market. First, in the global air transport market, routes between 1000 and 2000 km are identified as the fastest growing segment. Gravity model analysis reveals that there is potentially significant room for further growth from cross‐border liberalization. Second, in the impact assessment of market liberalization in Northeast Asia, the effect of tripartite market liberalization of triangular routes that connect major cities in each of the three nations, Japan, South Korea and Mainland China, is analyzed. Simulation using a Cournot model with product differentiation shows that overall welfare gains would be achieved from tripartite liberalization. Air carriers' losses are overridden by an increase in consumer surplus. Such an arrangement by the three nations might eventually lead to an integrated environment in which airlines could evolve into a true multi‐hub Northeast Asian air carriers.     

Extensions of linear diagonal-parameter symmetry and quasi-symmetry models for cumulative probabilities in square contingency tables

For square contingency tables with ordered categories, CAUSSINUS [Annales de la Faculté des Sciences de l'Université de Toulouse (1965) Vol. 29, pp. 77–182] and AGRESTI [Statistics and Probability Letters (1983) Vol. 1, pp. 313–316] considered the quasi-symmetry and the linear diagonal-parameter symmetry models, respectively, which have multiplicative forms for cell probabilities. This paper proposes two kinds of models that have the similar multiplicative forms for cumulative probabilities that an observation will fall in row (column) category i or below and column (row) category j (> i ) or above. The endometrial cancer data are analyzed using these models.     

Small- and medium-sized enterprise internationalization: Towards the knowledge-based model

Firm internationalization research has grown throughout the last 50 years resulting in a number of theories and models. Although each theory and model enables us to see some parts of the picture, a holistic approach is needed to provide us a full picture. The so-called knowledge-based models proposed so far drew upon the transaction cost theory, the social capital theory, and the knowledge management models. This paper reviews previous research and builds a more comprehensive knowledge-based model of small- and medium-sized enterprises internationalization. The model includes “knowledge factors”, which we identified from internationalization literature. These include the market knowledge and the experiential knowledge composed of network knowledge, cultural knowledge, and entrepreneurial knowledge. Acquisition as well as utilization of each kind of knowledge during the different phases of internationalization is presented. The model is a step towards deeper understanding of the role of knowledge in SME internationalization.     

Productivity growth,on-the-job search,and unemployment

The impact of long-run productivity growth on unemployment is studied. We incorporate disembodied technological progress and on-the-job search into the endogenous job separation model of Mortensen and Pissarides (1994). Because we include on-the-job search, faster growth reduces unemployment by decreasing job separation and inducing job creation. The incorporation of on-the-job search substantially improves the ability of the Mortensen and Pissarides model to explain the effect of growth on labor market variables. Specifically, our model generates not only an empirically consistent sign of the effect, but also a larger impact of growth on unemployment than the standard matching model.     

Gross worker flows and unemployment dynamics in Japan

This paper studies the dynamics of worker flows in Japan between 1980 and 2009. We construct gross worker flows data using the monthly Labor Force Survey. Our data enables us to examine the size and cyclical patterns of the flows and transition rates between employment, unemployment, and not being-in-the labor force. We find that the cyclical pattern of worker flows is similar to that found in other countries; however, worker flows in Japan are generally smaller than those in the US and European countries. We also decompose changes in unemployment into contributions from unemployment inflow and outflow rates. We find that both inflow and outflow rates significantly affect variations in unemployment.     

Macroeconomic Policy and Ownership Structure in a Mixed Transition Economy

Both state and non-state sectors have important roles in the Chinese economy. A dynamic model to analyze capital accumulation in state and non-state sectors is constructed and the fiscal and monetary policy requirements for the coexistence of a state sector and a non-state sector are derived. Our findings suggest that the effects of fiscal and monetary policies on ownership structure depend on which government subsidization policy is implemented. The results indicate that lowering tax rates and tightening the money supply can speed up the transition pace, but these policies do not necessarily contribute to developing an economy with a greater share for the non-state sector.J. Comp. Econom., December 2000, 28(4), pp. 762–785. College of Economics, Osaka Prefecture University, 1-1, Gakuen-Cho, Sakai, Osaka 599-8531, Japan.     

Bayesian analysis of a Markov switching temporal cointegration model

This paper introduces a Bayesian approach to a Markov switching cointegration model that allows the cointegration relationships to be switched on and off depending on the regime. Unlike a classical method for nonlinear cointegration model that uses the cointegrating vector based on a linear cointegration model, the proposed Bayesian method allows for estimation of the cointegrating vector within a nonlinear framework conditional on the regime variables through the Gibbs sampling so that it generates more reliable estimation. The Bayes factors are applied to test for Markov switching and model specifications. The purchasing power parity (PPP) relationship between UK and US is investigated using the proposed model for illustration.     

The analysis of research and development efficiency in Japanese companies in the field of fuel cells using patent data

Using patent data, a new quantitative analytical method categorizes the degree of integration of leading edge technologies in order to examine the current research & development (R&D) status and strategies of companies focusing in the fuel battery field, an area showing great potential as an alternative to fossil fuels. Specifically, this paper presents three types of categorization reflecting the International Patent Classification (IPC) of patent data, and introduces the concept of 'innovation positions', which is based on this categorization. Application purposes can be different between various industrial sectors, even within the same technological field; therefore, the progress status of R&D varies and that fact is reflected in innovation positions. Additionally, this paper makes clear that innovation positions reflect differences in companies' core competences, even in the same industry. Furthermore, by conducting an analysis based on F-terms, it has been shown that dissimilarities exist in the focus of companies in the technological development of elements, even for those with identical innovation positions. This analytical method provides an original approach to comprehend technological linkages and innovation.