Issues on Japan's Intellectual Product

Evidence suggests that Japan's basic research levels seem to lag behind that of the USA. This paper seeks to investigate (1) the reasons for this difference in the context of societal impact on the creation of intellectual products, (2) the influence of the different legal systems as they relate to the treatment of intellectual products, and (3) the aspect of market size as an essential factor in the creation of intellectual products protected by copyright. This last category includes intellectual products such as visual products, publications, music, and computer software. © 1997 John Wiley & Sons, Ltd.     

Business process semi-automation based on business model management

It is important to respond to customers' requirements more rapidly than ever before due to the recent trend in e-business and its technologies. In order to achieve an agile response, we have to manage business models, to reflect the changes in the models and to develop or modify IT systems for further chances. This paper proposes a management framework of layered enterprise models. The proposed framework consists of a business model repository and a software repository, and defines three different grain sizes of modeling layers, namely business modeling, business process modeling and business application modeling, in order to support business modeling and application development. This framework helps us to develop business application in incremental deployment of analysis, design, and implementation to execute business processes. We have implemented a prototype environment using Java. Each repository's contents are described using XML so that the repositories are interoperable. Copyright © 2003 John Wiley & Sons, Ltd.     

BOOK REVIEWS

Regulation and Development by Jean‐Jacques Laffont, Cambridge, Cambridge University Press, 2005, xxiii + 268 pp. The Economics of Microfinance by Beatriz Armendáriz de Aghion and Jonathan Morduch, Cambridge, Mass., MIT Press, 2005, xiv + 346 pp. Asian States: Beyond the Developmental Perspective edited by Richard Boyd and Tak‐Wing Ngo, London, RoutledgeCurzon, 2005, xv + 224 pp. Growth, Structural Change and Regional Inequality in Malaysia by Asan Ali Golam Hassan, Aldershot, Ashgate, 2004, xiv + 245 pp. The Monetary Geography of Africa by Paul R. Masson and Catherine Pattillo, Washington, D.C., Brookings Institution Press, 2005, xx + 217 pp.     

The Choice Between Flexible Exchange Rates, Capital Control and the Currency Board in Asian Countries: A Perspective from the "Impossible Trinity"

We attempt to compare adjustment costs under exchange rate regimes in East Asian economies during their recovery processes. The criteria are the degree of overshooting in exchange rates, the changes in country risks, and the severity and duration of the recovery processes. Linear ranking is difficult. Managed rates with capital control worked for macroeconomic performance despite the welfare loss due to blocking capital flows. The currency board system worked well for stability, but recent experiences of Argentina and Hong Kong were deflationary. Under flexible rates, many economies that received IMF grants suffered a drastic initial downturn but later recovered vigorously. JEL Classification Numbers: F31, F32, F33.     

A welfare analysis of global patent protection in a model with endogenous innovation and foreign direct investment

This paper constructs a North–South quality-ladder model in which foreign direct investment (FDI) is determined by the endogenous location choice of firms, and examines analytically how strengthening patent protection in the South affects welfare in the South. Strengthening patent protection increases the South's welfare by enhancing innovation and FDI, but it also allows the firms with patents to charge higher prices for their goods, which decreases welfare. However, the model shows that the former positive welfare effect outweighs the latter negative effect. Moreover, introducing the strictest form of patent protection in the South, that is, harmonizing patent protection in the South with that in the North, may maximize welfare in the South as well as in the North. Further, a similar result can also be obtained in a nonscale effect model.     

Patent protection, capital accumulation, and economic growth

In this paper, we investigate how strengthening patent protection affects economic growth in an endogenous growth model where both innovation and capital accumulation are the driving forces of economic growth. In this model, stronger patent protection raises the profit flow obtained by innovation but reduces the factor demand for capital. This process accelerates innovation but discourages capital accumulation, and because of the negative effect on economic growth through reducing capital accumulation, strengthening patent protection may then impede economic growth. This result contrasts with earlier studies where innovation is the sole driving force for economic growth. Moreover, in an open economy model where technologies are transferred and capital is imported from abroad, the strictest protection of patents enhances technology adoption from abroad but impedes capital accumulation, and thus, the relation derived between patent protection and output can be nonmonotone. In terms of implications, these findings may be able to partly explain the complex relation found by some empirical studies in this area.     

Optimal Taxation of Elderly Care Services

This paper explores optimal taxation of market purchases of an elderly care service, which can also be produced in the home. Home production cannot be taxed. If children discount parents' utility relative to their own utilities, an intergenerational externality arises in the family. When home production of the service is significant, the optimal tax rate on market purchases should be: (i) high , if the service and leisure are complements and the externality is strong, (ii) low , if they are substitutes , irrespective of the degree of the externality.     

THE VERY RAPID INCREASE OF JAPANESE TOURISTS ABROAD AND THE ROLE OF NATIONAL WEALTH

The strong performance of the Japanese economy, rising stock and land prices in Japan, as well as the strong yen, have prompted Japanese to travel abroad in ever increasing numbers in recent years. Despite several obstacles against growth, such as limited vacation time for employees of Japanese corporations, relatively expensive airline tickets, capacity limitations of international airports in Japan, booming resort development in Japan itself, and imposed constraints on Japanese direct investment abroad, Japanese travelers abroad, the majority of whom are tourists, increased from less than five million in 1985 to almost 10 million in 1989. The traditional demand function based on income and price may not explain all of the growth of Japanese overseas tourism, since some of the increase in Japanese travelers may stem from increases in expected future income based on increased wealth. This wealth effect hypothesis is tested using a log-linear regression model. It is found that wealth is a better predictor of overseas tourism levels than income. The effect of wealth increases on overseas tourism is also found to have a lag time of about one year. For this reason, it is proposed that the slowing in the Japanese economy this year will negatively impact Japanese overseas tourism next year.