Business groups in a market economy

The purpose of this paper is to examine the nature and significance of the interfirm relationship called the business group. First, the nature of the Japanese business group is discussed. It is then pointed out that the business group is not a phenomenon unique to Japan, and an effort is made to explain the significance of the business group in the context of a market economy, using the Williamsonian approach to questions of internal organization and the market. Finally, the relationship between the input-output relationship of the firms and their group affiliation is tested.     

A Note on Environmental Awareness and Cross-Border Pollution

Considering a Nash equilibrium in which a developed country chooses the amount of foreign aid and a developing country sets the emission tax rate and the proportion of the received aid allocated to public abatement of pollution, it is shown that an increase in the recipient countrys environmental awareness will reduce the level of cross-border pollution and benefits the donor though its foreign aid is increased.     

Mechanism design for a solution to the tragedy of commons

We consider the problem of the tragedy of commons in cooperative production economies, and propose a mechanism to resolve this tragedy, taking into account that the coordinator cannot perfectly monitor each agent’s labor skill and each agent may have an incentive to overstate as well as understate his own skill. Even in such a situation, the mechanism implements the proportional solution (Roemer in Soc Philos Policy 6:74–92, 1989 and Roemer and Silvestre in J Econ Theory 59:426–444, 1993) in Nash and strong equilibria when it is played as a normal form game. Moreover, the mechanism triply implements the solution in Nash, subgame-perfect, and strong equilibria when it is played as a two-stage extensive form game. We are greatly thankful to Semi Koray, William Thomson, and an anonymous referee of this journal for their concrete and helpful comments on improving the paper. An earlier version of this paper was presented at the annual meeting of the Japanese Economic Association held at Hitotsubashi University in October 2001 and at the Conference on Economic Design held at NYU in July 2002. We are grateful to Takehiko Yamato for his useful comments in the former conference. We are also thankful to Tatsuyoshi Saijo, Kotaro Suzumura, and Yoshikatsu Tatamitani for their kind comments.     

Current accounts of Japanese airports

The paper examines the current account of 41 major airports. When we exclude depreciation costs, only seven airports are profitable. When depreciation is excluded, only three airports are making profits. Airports managed by local governments are very difficult to sustain financially without subsidies. Airports with more than 5.2 million passengers are profitable when depreciation is taken into account, however most local airports have fewer than 2.5 million passengers. When depreciation costs are excluded, airports need at least 2.7 million passengers to be viable.     

Accounting disclosure,corporate governance and the battle for markets: The case of trade negotiations between Japan and the U.S.

Developments in the socio-economic and political spheres impact upon accounting disclosure and corporate governance. In the context of globalisation, moves have been made ostensibly to converge practices towards global standards, which on the face of it equate to Anglo-American ways. Here, we focus on Japan in this context. We give particular attention to pressure apparently placed upon Japan by the U.S. vis-à-vis bilateral state-level trade negotiations – an under researched area – from the late 1980s. We critically interpret how the Japanese Government has responded to such apparent pressure.     

Management of rainfall-related environmental risks in urban area

Rainfall brings urban residents both benefits, such as water resources, but also adverse risks such as flooding. Additionally, it has been recognized that wet weather run-off discharges pollutants

and transfers chemicals and pathogen bacteria into the aquatic ecosystem. This causes not only deterioration of water quality but also environmental pollution risk. Both the flood risk and environmental pollution risk are treated here as ‘rainfall-related environmental risks’. Although these two kinds of risks are quite different in their characteristics, the main purpose of urban wet weather flow management is how to decrease these risks. Furthermore, these risks have a similar background which is concerned with both the urban structure and the life-style of urban residents. Recently, flood disaster has occurred in the Japanese urban area with increasing frequency causing damage due not only to rainfall intensity, but also the vulnerability of urban structures against heavy storms. Although there has been urban area expansion and a decline in substrate permeability, wet weather flow management in Japan is aimed simply to drain the increased run-off volume quickly. As for the management of hazardous chemicals which might be discharged together with rainfall run-off, this has not been implemented sufficiently. It is necessary to develop a methodology to reduce rainfall-related environmental risks in urban wet weather flow management. In this paper, the possible risk management process and control options of rainfall-related risks will be discussed after a summary of both the similar and differing points between inundation risk and environmental pollution risk. As a result, it is deemed necessary to operate a scheme to raise the rainfall-related environmental risk perception level of urban residents to ensure their participation in risk management.