Exchange rate and pricing behavior: Comparison of Taiwan with Japan for manufacturing industries

This paper investigates a theoretical model that explains the relationship between exchange rate and profit when it takes the effect of exchange rate on both input and output prices into account. Using the panel data of 19 two-digit Taiwanese and 17 two-digit Japanese manufacturing industries over the period of 1984–1994, the empirical evidence shows that a higher degree of net external exposure in Taiwan than it in Japan. The empirical results also suggest that an appreciation of home currency, industries of Taiwan take advantage of the appreciation of the New Taiwan dollar, enjoying a reduction in the price of imported inputs into production. As far as this study shows, however, the merit to imported inputs of a strong Japanese Yen has not been confirmed in Japan.     

How Japanese firms can weather endaka periods: Evidence from the transportation equipment industry

Japan has experienced several appreciation episodes. These appreciations may squeeze profit margins and lower export volumes. This paper investigates whether firms can weather appreciation periods by producing differentiated rather than commoditized products. To do this it investigates different sectors within the Japanese transportation equipment industry. Results from estimating pricing-to-market (PTM) coefficients indicate that firms producing differentiated products can pass-through more of exchange rate appreciations into higher foreign currency prices and thus better preserve their profit margins. Results from estimating trade elasticities are consistent with the PTM results and indicate that the automobile industry has exported much less than predicted after the yen depreciated in 2012. Finally, estimates of the stock market exposure across sectors indicates that the profitability of firms producing differentiated products is less exposed to appreciations. Producing differentiated, knowledge-intensive goods can thus help firms to survive endaka periods.     

The logic of franchise contracts: Empirical results of Japan

This paper examines the factors determining the choice between company-owned outlets and franchising. A number of researchers have based their studies on the data of retail contracting in the US. However, there has been little empirical analysis in the case of Japan. In this paper, we provide a comprehensive assessment of various alternative hypotheses about franchising by using Japanese data. The principal-agent model of franchising that assumes risk-sharing and moral-hazard is supported by our data.     

Profit margins in Japanese retailing

Using a rich data source, we explain differences and developments in profit margins of medium-sized stores in Japan. We conclude that the protected environment enables the retailer to pass on all operating costs to the customers and to obtain a relatively high basic income. High service levels are positively related with high profit margins, illuminating the importance of service in Japan. Small store competition does not affect performance of medium-sized stores, because small stores operate under circumstances different from those of medium and large stores.     

日本对外直接投资的贸易效应及其启示

对外直接投资的贸易效应是学界研究的一个重要课题,日本对外直接投资与贸易的密切关系也备受关注。本文将日本的主要贸易伙伴分为四组,实证分析日本对外直接投资的贸易效应发现:日本的对外直接投资是贸易互补型的,其对日本的进出口贸易具有明显的长期促进作用;日本的对外直接投资是引起其贸易顺差的一个重要因素,日本对美国等对日贸易逆差国的直接投资扩大了其与这组国家的贸易顺差;日本对NIEs、中国等的直接投资并不是导致日本产业空心化的主要原因。实证结论在利用对外直接投资带动出口贸易、减少贸易摩擦以及在对外转移产业时避免国内产业空心化等方面为我国的实践提供了借鉴。     

Wholesale pricing in a small open economy

Summary This paper addresses the empirical analysis of wholesale profit margins using data of the Dutch wholesale sector, 1986. At the heart of the analysis is the typical nature of wholesale production: wholesalers do not produce a tangible product, but offer a service capacity. This has an immediate impact on the identification, interprelation and measurement of determinants of profit variations. A model is set up to explain variations in wholesale profit margins, which is inspired by two widely applied approaches to industry pricing: the behavioural mark-up model and the marginalist price-cost model.The authors gratefully acknowledge extensive criticisms by Johan Koerts and Arjen van Witteloostuijn and research assistance by Michield Eijkhout who also co-authored earlier research reports. The Central Bureau of Statistics is acknowledged for providing access to their census data of the Dutch wholesale trade. Remaining errors are as usual the sole responsibility of the authors     

The Wage Rate and the Worker's Productivity: the Case of the Japanese Chemical Industry

The purpose of this paper is to analyze the relationship between the wage rate and the productivity of the blue-collar worker in Japan. In this paper, micro data from a factory of chemical industry in Japan is used for our empirical study. Our empirical results indicate that, if the index of the labor productivity is an appropriate index of the labor productivity, the labor productivity plays a crucial role in the determination of the wage rate in a particular Japanese chemical factory of the 1960s.     

What drives the profitability of Japanese multi-business corporations? A variance components analysis

This article decomposes the business-level profit rate of Japanese multi-business corporations by performing a variance components analysis on a large sample of publicly traded non-financial firms in 1998-2003. Consistent with US evidence, estimation results demonstrate that profitability is predominantly determined by business-level factors, not corporate-level ones, suggesting that a typical multi-business corporation in Japan is a combination of relatively distinct businesses in terms of profit.     

日、德融资模式比较及其中国融资模式的选择

美国金融危机使得人们必须重新审视融资模式,而前人对此的研究文献重点放在两种融资模式的比较上,其实更应该研究与我国融资模式相似的日本和德国的融资模式。本文通过比较日德融资模式在融资市场全面发展程度、间接融资市场和直接融资市场的联系程度以及政府政策导向的差异,解释了20世纪90年代以来日本和德国经济表现的差异,对我国融资模式的选择提出一些建议。     

Japanese nonprofit sector in comparative perspective

Nonprofit organizations have long been less visible in Japan than in most other developed countries. But this does not imply that Japan does not have a sizable nonprofit sector. To the contrary, large numbers of Japanese hospitals, universities, social service organizations, and community groups are essentially not‐for‐profit in form.     

Corporate governance in Japan: past performance and future prospects

Much has been written about the Japanese 'model' of corporategovernance. Indeed, Japanese-style corporate governance hasbeen described as an efficient alternative to corporate governancemechanisms available in the West, and as a model for developingeconomies. As opposed to American-style corporate governance,in which hostile takeovers and managerial incentive schemesplay a major role, Japanese firms have traditionally reliedon monitoring by large shareholders and banks. This articledescribes the evolution of corporate governance in Japan sincethe Second World War, and surveys the empirical evidence onits performance. Although there is substantial evidence on theeffectiveness of the Japanese system, there is also evidenceon its significant shortcomings. The article also evaluatesthe effects of the current macroeconomic and banking criseson corporate governance in Japan, and suggests possible directionsfor future changes, which are likely to make Japan more similarto the USA in this respect.     

Vertical Intra-Industry Trade and Foreign Direct Investment between Japan and European Countries

In this paper, we provide an overview of the development of vertical intra-industry trade (VIIT) between Japan and various European countries, including both old and new EU members, as well as emerging Central and Eastern European countries. VIIT indices constructed in this paper cover a much wider range of margins of unit price ratio than existing studies. Our empirical model attempts to explain the distributional characteristics of VIIT through foreign direct investments (FDI), in addition to traditional determinants of IIT, such as differences in GDP per capita, average GDP, and smaller and larger GDPs. Our sample covers the period from 1988 to 2004 for bilateral trade between Japan and 31 European countries. Our econometric methodology for these panel data uses fixed-effect model estimation with a variable transformation determined by a Box-Cox approach. We find that intra-industry trade between European countries and Japan increases with their corresponding Japanese FDIs, especially for new EU member countries. Our results also indicate that it is important to measure a wider range of quality based on relative prices rather than the traditional ratio used in the literature.     

Imperfect Competition in German Food Retailing: Evidence from State Level Data

An increase in the level of retail concentration in food markets across Europe has raised concerns about the implications of retail dominance in the food supply. This paper measures oligopoly and oligopsony market power in the German food retail industry and incorporate specific details about the German meat market and the European BSE crisis. In this paper, simultaneous estimates of the degree of oligopoly and oligopsony market power in the German food retail industry are derived by applying a set of monthly state level retail beef and pork marketing data in the federal state of Hessen, Germany, from 1995–2000. Results strongly suggest evidence of retail oligopoly and oligopsony power. Lerner index estimates indicate retail market power accounts for 0.5% to 11% of the retail unit margins of beef and pork.

Capital requirement and financial crisis: The case of Japan and the 1997 Asian crisis

This study investigates the direct link between the implementation of the 1988 Basel capital requirement in Japan and the shrinkage of banks’ foreign assets, particularly in Thailand in the 1990s. The empirical analysis proceeds in two stages. The first stage investigates the hypothesis that the capital crunch in Japan induced Japanese banks to alter their portfolios and reduce their foreign assets. The second step tests the hypothesis that the change in behaviour of the Japanese banks induced the increase of the probability of financial crisis in Asia. Our results support the responsibility of the Japanese capital requirement, among other factors, in triggering the 1997 Asian financial crisis as an external common shock and give a new angle on the financial crisis literature.     

The boom and the bust of the Japanese economy: A quantitative look at the period 1980–2000

In this paper we quantitatively investigate the boom and the bust of the Japanese economy during 1980–2000 using the business cycle accounting technique. This method helps us identify the distortion margins called “wedges” that played a significant role in accounting for the output fluctuations. Applying our model to Japan, we find that efficiency and investment wedges can almost wholly account for output increases of the 1980s. Labor wedges by themselves would have caused a recession beginning in late 1980s but was overwhelmed by the positive impact of efficiency and investment wedges. In the 1990s, efficiency, labor and investment wedges all contributed to the recession. We next extend the literature by conducting robustness tests to investigate the sensitivity of BCA results to small modifications in methodology.     

An empirical evaluation of the 1986 Semiconductor Trade Arrangement

In the paper, we aim to empirically evaluate the extent to which the 1986 Semiconductor Trade Arrangement (STA) affected the Japanese producers’ behavior in the market for the 1 M Dynamic Random Access Memory (DRAM) chips. Based on the Euler equation of non-Japanese firms’ learning-curve optimization, we estimate the marginal cost function and then calculate Japanese price-cost margins by using nonparametric estimation. Our estimation results show that the price-cost margins of Japanese firms were set far above the learning-curve optimization margins but still lower than the marginal costs on average. Hence we can infer that the STA could not push the price above the average Japanese marginal cost but facilitate the Japanese firms to collude to set the price-cost margins by taking account of learning-by-doing effects. This empirical finding and no significant spillover effect are combined with other observations to imply that the STA might have enabled later-entering non-Japanese firms to rapidly expand their market shares and get a foot in the door of the R&D competition for new generational DRAM.     

世界五百强企业的比较研究——基于2009年排行榜的分析

文章基于2009世界500强企业排行榜,从企业数量、产权性质、行业分布、收入与利润等方面对美国、日本、法国、德国、英国上榜企业进行对比分析;在此基础上,分析了中国上榜企业的成就与问题,并得出相应启示与建议。     

What affects intranational price dispersion?: The case of Japanese gasoline prices

The empirical analysis on price dispersion, as described by [Engel, C., Rogers, J.H., 1996. How wide is the Border? American Economic Review 86, 1112–1125], is to investigate the determinants of international relative price fluctuations. Using data from the Japanese gasoline industry, we investigate the implications of the market structure for intranational price dispersion. Our empirical results suggest that: (1) in conformity with the double marginalization model, the dispersion of the wholesale gasoline price is affected by the relative retailer’s margin and (2) the dispersion of the retail gasoline margin is influenced by the degree of competition and advertising. Considering these results synthetically, the retail price dispersion is amplified by the retail market structure both directly and indirectly.     

Impact of international expansion strategy on the performance of Japanese banks

The effect of cross-border diversification on bank performance is part of the broader debate on how multinational banking and financial integration affect the global financial economy. Previous studies that examined this relationship present mixed results - namely that cross-border diversification improves bank performance but also increases bank risks that could lead to systemic failure. Even so, this line of debate has not been examined in the case of Japanese banks conducting international operations. The present study questions whether cross-border diversification improves the performance of Japanese banks and to what extent each cross-border expansion activity affects bank performance. The latter was largely ignored in previous studies. Our results show that cross-border diversification improves cost efficiency but decreases/harms the profit efficiency of the banks analyzed. In addition, we find that the expansion of foreign assets and foreign branch operations present funding risks and operational inefficiency. We offer two important recommendations. First, as a major player in international lending, the current expansion activities of Japanese banks require close monitoring and supervision to prevent systemic risk resulting from aggressive and risky overseas expansion activities. Second, the current expansion strategies of Japanese banks, especially the expansion of overseas assets and branch operations (retail banking), should be re-examined.     

Characteristics and performance of institutional and foreign investors in Japanese and Korean stock markets

This study examines the characteristics of the stock ownership by institutional and foreign investors, as well as their effects on stock price performance in Japan and Korea. The main results of this study are summarized as follows. First, foreign investors have a clearer preference for stocks with large capitalization and low book-to-market ratios than do institutional investors in both Japanese and Korean stock markets. Second, foreign investors prefer stocks with a high return on equity, especially in Korea. Third, average returns have more apparent differentiation among institutional (foreign) ownership portfolios than among foreign (institutional) ownership portfolios in Japan (Korea). Fourth, the stocks that are preferred simultaneously by both institutional and foreign investors show statistically significant positive abnormal returns in both Korea and Japan, whereas those preferred by either institutional or foreign investors show statistically significant positive abnormal returns only in Korea. The institutional investors' incentive for stock holding, the extent of stock market efficiency, and stock price polarization could be the possible explanations for the different empirical results observed for Japan and Korea. J. Japanese Int. Economies 21 (2) (2007) 195–213.