EXISTENCE OF A NONNEGATIVE EQUILIBRIUM PRICE VECTOR IN THE MEAN-VARIANCE CAPITAL MARKET

We derive a necessary and sufficient condition for the existence of a nonnegative equilibrium price vector under which the total demand and supply of each asset balances in the standard mean-variance capital market. Also, we give an explicit formula for such a price vector. This formula shows that the price of assets is an increasing function of , the weighted average of the requested rate of return of individual investors, which tends to infinity as approaches the expected rate of return on the market portfolio. Further, we construct a macroeconomic index which gives information about the soundness of the capital market.     

Globalization and Greater Flexibility in the Japanese Labor Market: Exploring the Macro–Micro Link

The author explores the missing links between globalization and greater flexibility in the Japanese labor market based on review of literature and available evidence. Understanding Japan’s responses to globalization requires a nuanced approach, which accounts for its historical trajectory and social-institutional context. Along with globalization, Japan is experiencing a greater infusion of foreign capital, and an increasing presence of foreign firms. These foreign firms bring human resource practices that are more market driven and less socially embedded compared to the status quo. The diverging human resources practices of foreign firms have spillover effects that may destabilize the Japanese employment system in the long run.     

Capability building through innovation for unserved lower end mega markets

Although product innovation for unserved lower end mega markets in large developing countries has been recognized as an opportunity for improving the competitiveness of local firms, limited research has been conducted that explicitly explores how innovation capabilities can be built for these markets. This study investigates Tata Motors' Nano as an exploratory case of building innovation capabilities. This paper shows that the building of innovation capability could be achieved through creating a process that overcomes ‘the deficiency problem’ in generating radically cheap priced original products.The study's contribution to the literature is that it addresses issues of building local firms' innovation capabilities through creating original products for the unserved lower end market, in which advanced country firms have limited experience.Nano, as an unprecedented innovation in the automobile industry, reveals a path to building innovation capability that has not previously been observed. We show that detailed processes involved in generating an original product for the lower end market provide insights on the strategy in terms of target price setting, initiating innovation process overcoming ‘the deficiency problem’, and creation of complementary resources.     

Multilateral Comparison of Cost Structures in the Input–Output Tables of Japan,the US and West Germany

This paper presents a multilateral comparison of relative levels and structures of costs of production in Japan, the US and West Germany. The analysis is carried out by using harmonized input–output tables, which are converted at US prices by using adjusted sectoral purchasing power parities. A new accounting methodology is derived from recent developments of index number theory, whereas the chosen multilateral comparison procedure gives results that are invariant with respect to the order of the pairs of countries examined.     

On the test of the correction mechanism for mis-pricing between assets using a statistical yield spread model

This paper investigates the existence of a correction mechanism for mis-pricing between Japanese stock and bond. By this correction mechanism we mean that when deviations occur from the equilibrium levels of the expected return differentials between stock and bond — the risk premium differentials, the market will tend to correct the mis-pricing and bring the expected return differentials back to the equilibrium levels. We assume that the yield spread between the predicted earnings price ratio of stock and the yield to maturity of bond reflects the risk premium between stock and bond, and estimate the equilibrium risk premium differentials and mis-prices between stock and bond by modelling their behaviors with a statistical yield spread model (SYS). Empirical results strongly indicate the existence of the mis-pricing correction mechanism, suggesting the inefficiency of securities markets.     

The Regime Switching Portfolios

In this paper we develop a portfolio selection theory under regime switching means and volatilities. We use log mean-variance as the portfolio selection criteria and, as a result, the theory is made substantially easier to implement than other existing theories. Moreover, the estimated regimes are easy to interpret as one of the regimes corresponds to the business cycle turning points. Finally, we conduct an asset allocation simulation and obtain reasonable results by introducing an idea of switching volatility targets.     

Coverage area expansion, customer switching, and household profiles in the Japanese broadband access market

This paper examines the diffusion process of Internet broadband access in Japan by modeling the household choice of access modes. Estimates reveal that the characteristics of users, rather than those of the access modes, play a significant role in demand substitution across the modes. Simulation exercises indicate that had optic fibers (fiber-to-the-home; FTTH) been made available to the whole country in 2005, only 10% of households would have switched to that mode. This result implies that once chosen, the household choice of access mode persists, and that indirect network effects are an important element in decisions to adopt the new technology of broadband. Finally, policy implications are discussed.     

Strategic complementarities and nested potential games

This paper reports that every finite game of strategic complementarities is a nested pseudo-potential game defined by Uno [Uno, H., 2007. Nested potential games. Economics Bulletin 3(17), 1–8] if the action set of each player is one-dimensional, except possibly for one player.     

Effective Rental Housing Demand in the Tokyo Metropolitan Region

This paper reports on the estimation of housing demand for tenants in Tokyo Metropolitan Region using household level data for 1993. The results indicate that the rental housing demand is inelastic with respect to permanent income and price, with coefficients as 0.31 and -0.093 respectively. Other important variables, which determine housing demand for tenants are length of stay and type of household. Larger households demand more housing. However, keeping the size of household constant, households with elderly members have higher demand for housing. The only exception to the rule is households formed with members not belonging to same nucleus family demand less housing.