Japan's Security Policy in East Asia

Japan's strategic thinking has been driven by three main factors: a fear of isolation, calculation of the geopolitical strength of China (and to a lesser extent, Korea), and accommodation to the prevailing international power structure. During the Cold War Japan aligned with Washington, but maintained sufficient distance to explore a mutually beneficial relationship with China based on Japan's dominant economic position. As Chinese power has grown and Japan's own economic tools for statecraft have slowed, Tokyo has moved closer to the United States to balance Chinese power. Japan has also had to seek new ways to shape the security environment in Asia, turning to multilateral diplomacy such as the Changmai Initiative. Where Japan's diplomacy in Asia in the 1980s and 1990s emphasized Japan's unique ability to champion "Asian" values with the West, increasingly Tokyo has emphasized its unique ability to champion universal values of democracy and rule of law in Asia. This theme has been used by conservative governments to improve Japan's brand over China, but also builds on a tradition of Japanese diplomatic efforts to take a lead in rule-making in the region. Prime Minister Koizumi's assertive foreign policy helped to reinvigorate Japan's international position, but he moved from the traditional three part formulation of Japan's orientation – the U.S. alliance, the UN system and Asia – to a simpler two part formulation of "the U.S.-Japan alliance and international cooperation." The lack of focus on Asia has contributed to growing tensions with South Korea and China over history issues, even as Japan's global and broader regional standing has increased according to most opinion polls. These regional challenges will continue to confront future Prime Ministers well past Koizumi.     

Smoothly mixing regressions

This paper extends the conventional Bayesian mixture of normals model by permitting state probabilities to depend on observed covariates. The dependence is captured by a simple multinomial probit model. A conventional and rapidly mixing MCMC algorithm provides access to the posterior distribution at modest computational cost. This model is competitive with existing econometric models, as documented in the paper's illustrations. The first illustration studies quantiles of the distribution of earnings of men conditional on age and education, and shows that smoothly mixing regressions are an attractive alternative to nonBayesian quantile regression. The second illustration models serial dependence in the S&P 500 return, and shows that the model compares favorably with ARCH models using out of sample likelihood criteria.     

Asset specificity and economic organization

This paper examines the optimization problem of firm and market organization in which both production cost and transaction cost differences are expressed as a function of asset specificity. In general, markets enjoy advantages by aggregating the demands of many buyers, thereby realizing economies of scale or scope. Such production cost savings need to be assessed in relation to the transaction cost advantages that internal organization sometimes enjoys over markets in adapting to changed circumstances. As it turns out, both production cost economies and the transaction cost differences between firm and market organization vary systematically with the characteristics of the investments. This paper employs a unified framework to assess the choice of organization form. The condition of asset specificity is featured.     

Property Right and Organizational Characteristics of Producer‐owned Firms and Organizational Trust

Abstract ** :  We examine how organizational characteristics of producer‐owned firms are correlated with the level of perceived trust among cooperative members, using survey data from a sample of U.S. agricultural cooperatives. Our results indicate trust is correlated with property right and organizational structures previously identified in the literature as significant for cooperative performance. We find that the norm of equality and the homogeneity of member interests are key correlates of organizational trust in producer‐owned firms. We also find that some property right structures that improve organizational trust are counterproductive for member investment incentives .     

An Investigation of the Impact of Interest Rates and Interest Rate Volatility on Australian Financial Sector Stock Return Distributions

Abstract:   This paper extends the existing literature by analysing the dual impact of changes in the interest rate and interest rate volatility on the distribution of Australian financial sector stock returns. In addition, a multivariate GARCH‐M model is used to analyse the impact of deregulation on the financial institutions sector. It was found that there is a consistent inter‐temporal trade off between risk and return over the different regulatory periods. Moreover, finance corporations were found to be highly sensitive to new shocks across the financial sector and deregulation increased the risk faced by finance corporations and small banks – effectively increasing the required rate of return and explaining the continued rationalisation of these sectors. Furthermore, deregulation has changed the fundamental relationship between interest rates and large bank stock excess returns from positive in the pre‐deregulation period to negative in the post‐deregulation period. This reflects the changing institutional environment from one of controlled credit rationing to a more competitive environment.     

Learning to Build a Car: An Empirical Investigation of Organizational Learning

abstract    This study provides a longitudinal empirical examination of the basic elements of Nonaka's (1994 ) dynamic theory of organizational knowledge creation. First, the data illustrate the notion that knowledge creation in organizations proceeds through an intertwined four-phase process: (1) socialization (tacit knowledge amplification); (2) externalization (tacit knowledge is transformed into explicit knowledge); (3) combination (explicit knowledge amplification); and (4) internalization (explicit knowledge is transformed into tacit knowledge). Second, the study extends Nonaka's theory by comparing the relative amount of intra-organizational knowledge transfer occurring during periods of product redesign with the amount of knowledge transfer occurring during steady-state periods. The questionnaire data suggest that the overall level of knowledge transfer is higher during periods of product redesign than it is during the steady state, whereas the interview data indicate that there were more mentions of knowledge transfer during the steady state. Third, the data suggest that there may be benefit in adding tacit error correction as a fifth phase in the learning cycle. This phase is characterized by a dual emphasis on externalization and internalization. Implications of these findings are discussed.     

Identifying individual differences: An algorithm with application to Phineas Gage

In many research contexts it is useful to group experimental subjects into behavioral “types.” Usually, this is done by pre-specifying a set of candidate decision-making heuristics and assigning each subject to a heuristic in that set. Such approaches might perform poorly when applied to subjects with prefrontal cortex damage, because it can be hard to know what cognitive heuristics such subjects might use. We suggest that the Houser, Keane and McCabe (HKM) robust classification algorithm can be a useful tool in these cases. An important advantage of this classification approach is that it does not require one to specify either the nature or number of subjects' heuristics in advance. Rather, both the number and nature of the heuristics are discerned directly from the data. To illustrate the HKM approach, we draw inferences about heuristics used by subjects in the well-known gambling task [Bechara, A., Damasio, A.R., Damasio, H., Anderson, S., 1994. Insensitivity to future consequences following damage to human prefrontal cortex. Cognition 50, 7–12].     

Firm responses to secondary stakeholder action

In this paper, we explore the conditions under which secondary stakeholder groups are likely to elicit positive firm responses. To this end, we build upon and advance Mitchell, Agle, and Wood's (1997) stakeholder saliency and identification framework by defining saliency in terms of actions, not perceptions, and by proposing that power, legitimacy, and urgency arise out of the nature of stakeholder–request–firm triplets. To test this framework, we build a unique dataset of over 600 secondary stakeholder actions within the United States, all concerning environmental issues over the period 1971–2003. Copyright © 2006 John Wiley & Sons, Ltd.     

The fiscal sociology of Gino Borgatta: Pareto, extra-economic redistribution and economic growth

The purpose of this study is to establish the extent to whichBorgatta's early fiscal sociology is consistent with, and differentfrom, Vilfredo Pareto's critical views on fiscal theory. Particularemphasis is given to the treatment of the relationship between‘extra-economic’ redistribution, achieved throughfiscal measures, and economic growth. Since evidence of Pareto'sinfluence is much weaker in Borgatta's more mature studies,the ‘definitive’ Paretian fiscal sociology thatemerged in his early ‘Lo Studio Scientifico dei FenomeniFinanziari’ is investigated for possible indications ofwhy Borgatta did not subsequently develop fiscal studies furtheralong Paretian lines.