Functionality development dynamism in a diffusion trajectory: A case of Japan's mobile phones development

While it is generally accepted that Information Technology (IT) has a self-propagating function which ensures that the more widespread its use, the greater its functionality, its emerging dynamism remains a black box.This paper attempts to shed some light on this dynamism through utilizing monthly trend data for the number of Japan's mobile phone subscribers over the last 12 years. A bi-logistic growth model demonstrating the diffusion trajectory initiated by both generations of mobile phones was constructed, with the goal of identifying the increase in the functionality development in the transition from traditional mobile phones with a simple communication function (1st wave mobile phone) to mobile phones with an Internet protocol function (2nd wave mobile phone).Through an empirical analysis utilizing the bi-logistic growth model, it was determined that the 2nd wave mobile phone emerged at an earlier stage of diffusion trajectory than the 1st stage mobile phone, which enabled a sustainable functionality development in Japan's mobile phones over the decade.Factors governing a dramatic decrease in mobile phones prices were analyzed, utilizing the result of the measurement of functionality development. This led to the discovery that while an increase in functionality development enhanced the price of mobile phones, this increase accelerated self-propagating diffusion, thereby enabling a dramatic reduction in prices through the effects of learning exercise and economies of scale.Based on the foregoing findings, the driving forces of self-propagating functionality development were analyzed, and it was determined that effective utilization of potential resources in innovation (e.g., assimilation of spillover technology and learning effects) is the key driving forces behind self-propagating functionality development.     

Alternative Approaches to Commercial Property Price Indexes for Tokyo

The paper studies the problems associated with the construction of price indexes for commercial properties that could be used in the System of National Accounts. Property price indexes are required for the stocks of commercial properties in the balance sheets and related price indexes for the land and structure components of a commercial property are required in the balance sheet accounts for the calculation of the Multifactor Productivity of the Commercial Property Industry. The paper uses a variant of the builder's model that has been used to construct Residential Property Price Indexes. Geometric depreciation rates are estimated for commercial offices in Tokyo using assessment data for REIT. The problems associated with the decomposition of property value into land and structure components are addressed. The problems associated with depreciating capital expenditures on buildings and with measuring the loss of asset value due to early retirement of the structure are also addressed.     

COMMERCIAL PROPERTY PRICE INDEXES AND THE SYSTEM OF NATIONAL ACCOUNTS

This paper studies the problems associated with the construction of price indexes for commercial properties that could be used in the System of National Accounts (SNA). Property price indexes are required for the stocks of commercial properties in the Balance Sheets of the country. Related service price indexes for the land and structure input components of a commercial property are required in the Production Accounts of the country if the Multifactor Productivity of the Commercial Property Industry is calculated as part of the SNA. The paper reviews existing methods for constructing an overall Commercial Property Price Index (CPPI) and concludes that most methods are biased (due to their neglect of depreciation) and more importantly, not able to provide separate land and structure subindexes. A class of hedonic regression models that is not subject to these problems is discussed.     

Diffusion, substitution and competition dynamism inside the ICT market: The case of Japan

Under the new information society paradigm that emerged in the 1990s, contrary to its conspicuous achievement as an industrial society, Japan is experiencing a vicious cycle between non-elastic institutions and insufficient utilization of the potential benefits of information and communication technology (ICT).However, a dramatic deployment of mobile telephones with Internet access service such as NTT DoCoMo's i-mode service in the late 1990s provides encouragement that, once the potential is exploited, Japan's institutional systems can effectively stimulate the self-propagating nature of ICT. The rapid deployment of Internet Protocol (IP) mobile service in Japan can be attributed to worldwide advances in the utilization of personal computers (PCs) and the Internet. Thus, a complex technology web triggered by the dramatic advancement of PCs and the Internet and co-evolving diffusion, substitution and competition dynamism has emerged in the global ICT market, particularly in Japan's mobile communication business.The above observations prompt the hypothetical view that, despite a lack of institutional elasticity, recent advances in Japan's IP mobile service deployment can be attributed to a co-evolutionary dynamism between diffusion, substitution and competition inside the ICT market. Thus, policy questions could be how to create such a co-evolutionary dynamism by means of ICT innovation, enriched functions, reduced price and competitive environment.In order to demonstrate the foregoing hypothesis, an empirical analysis of the mechanism co-evolving diffusion, substitution and competition dynamism inside Japan's ICT market is attempted by utilizing four types of diffusion models identical to respective diffusion dynamics.     

Separating the Age Effect from a Repeat Sales Index: Land and Structure Decomposition

Since real estate is heterogeneous and not all its quality attributes are observable, the repeat sales model pioneered by Bailey et al. (1963) has become one of the standard methods to estimate a constant-quality price index. The model, however, fails to adjust for depreciation, as age and time between sales have an exact linear relationship. This paper proposes a new method to estimate an age-adjusted repeat sales index by decomposing property value into land and structure components. As depreciation is more relevant to the structure than land, the property’s depreciation rate should depend on the relative size of land and structure. The larger the land component, the lower the depreciation rate of the property. This new method is applied to property transactions in Hong Kong and Tokyo. Hong Kong is shown to have a higher depreciation rate based on a fixed structure-to-property value ratio, while the resulting age adjustment is larger in Tokyo because its land value has shrunken over time.     

Bubbles,growth and imperfection of credit market in a two-country model

This study extends Hirano and Yanagawa (Rev Econ Stud 84(1):406–443, 2017) to an asymmetric two-country model and examines bubbles effects on each country’s long-run economic growth rate. This study also provides numerical examples with respect to the relationship between each country’s growth rate and their financial frictions in the balanced growth equilibria with bubbles and without bubbles. It shows that foreign bubbles have positive and negative effects on both countries’ growth rates, and which effect dominates depends on the level of financial development in both countries. In this study, the positive effect of bubbles tends to dominate when the total level of financial frictions in both countries is relatively low. When the total effect of bubbles on the growth rate is positive, the burst of foreign bubbles leads to a decrease in the growth rate in both countries. This implies that there is a positive correlation between foreign bubbles and the domestic as well as the foreign country’s growth rate.     

The relationship between pollution abatement costs and environmental regulation: Evidence from the Chinese industrial sector

Since the 2000s, China has been trying to strengthen emission controls in response to increasing pollution problems. However, strict implementation of emission controls generates pollution abatement costs. Using regional data for 29 provinces in the Chinese industrial sector from 1995 to 2010, this study estimated the pollution abatement costs for each province through the measurement of environmental efficiency, by applying a directional distance function approach. Moreover, using panel data analysis, this study clarified whether there is a nonlinear relationship between pollution abatement costs and environmental regulations. The empirical results are as follows. The study confirmed that the burden of abatement costs tended not only to occur in the central and western regions but also to increase in the eastern region. Moreover, the nonlinear relationship is inverted U‐shaped; thus, pollution abatement costs increase, as a negative effect of environmental regulations, until a certain inflection point, after which they decrease.     

Hierarchical impacts of the length of technology waves: An analysis of technolabor homeostasis

This work is based on the postulate that the hierarchical order of technology development can be maintained by a subtle balance between technology waves having different lengths, and that the current collapse of the “virtuous cycle” between technology development and economic growth can be attributed to a stall in the balance of technology waves. This paper examines the subtle technolabor relationship of Japan's electrical machinery industry, and supports such phenomena by demonstrating the hierarchical impacts of the length of technology waves.