Bank profitability and the bank lending channel: Evidence from China

This paper uses bank-level data to investigate whether the impact of monetary policy on bank lending depends on the characteristics of Chinese banks during the period 1985–2007. We find that the impact of monetary policy on lending is weaker for larger banks and banks with lower levels of liquidity, and that banks’ responses to monetary policy do not necessarily vary according to their capital. Further, to identify the bank lending channel more clearly, we test whether the impact of monetary policy varies according to profitability. The results show that profitable banks tend to be less sensitive to monetary policy, because when tight monetary policy leads to a fall in deposits, less profitable banks face a higher cost of capital.     

The new main bank system

We develop a main bank model where the main bank decides whether or not to raise additional funds from the capital market to continue to invest in a borrowing firm when nonmain banks withdraw funds. We show that the threat of withdrawal of nonmain banks is more likely to force the main bank to perform efficiently in handling troubled loans, thereby preventing problems with zombie firms, if the potential cash flow (liquidation value) of the firm decreases (increases) relative to the amount funded by nonmain banks. The theoretical results provide both efficiency evaluations for the renewal of the main bank relation in Japan after the end of the 1990s and empirical implications for the renewed main bank system.     

Lifetime employment in Japan: Concepts and measurements

This paper addresses three questions: (1) How big is lifetime employment in Japan? (2) How unique is it? and (3) How is it changing? Through the use of multiple data sets and methods, I find that no more than 20% of workers in Japan are likely to be employed under informal lifetime employment contracts, a far smaller percentage than has been reported. Job mobility remains considerably lower in Japan than in other advanced economies (particularly the US). Evidence regarding changes in lifetime employment is mixed. The share of workers in the core is declining, but the probability of job separations has remained stable for those who are already in the system. There is also evidence that the economic stagnation of the 1990s disproportionately affected females and younger workers.     

Predicting Japanese bank stock performance with a composite relative efficiency metric: A new investment tool

The paper's main objective is to predict bank stock performance one year ahead with a composite efficiency metric from relative contextual financial analysis. We bring together financial ratios, generalized data envelopment analysis and simulated annealing to rank Japanese banks on stock performance predicted from relative efficiency scores. An application of this ranking in a profitable investment strategy by designating long and short portfolios underscores the potential commercial value of the method. The method can also be used to monitor the effectiveness of ratios in forecasting stock performance and it is conducive to selecting predictive ratios when markets are changing rapidly.     

Household Debt,Dynamic Stability,and Change in Demand Creation Patterns

This paper examines dynamic stability and demand creation patterns of an economy in the context of the augmentation of household debt. First, we investigate the dynamic characteristics specific to an economy with household borrowing. Second, we reveal how demand creation and economic growth pattern change with the introduction of households' active borrowing. Our results shows that it is more favorable for the stability of an economy to politically control the interest rate on lending rather than to leave it to be determined by private financial institutions. Our results also indicate that even if the demand regime is wage-led, paradoxically, a rise in wage share may not necessarily stimulate economic growth. On the other hand, profit-led growth is more likely.     

Real interest rate equalization: some empirical evidence from the three major world financial markets

This article examines the linkage of real interest rates of the three major world financial markets (USA, Japan and the UK) with the use of cointegration methods. Unlike previous works, the investigation uses a trivariate vector autoregressive (VAR) model in which a constant term in the common stochastic trends space is excluded. Based on data generated after the liberalization of Japan's foreign exchange market at the end of 1980 (1981:1–1998:12), the article finds some empirical evidence indicating that the extent of the departure from the long-run real interest rate equalization (RIE) is not very large, although the null hypothesis of the long-run RIE is rejected in most cases.     

不同视角下的中国城镇社会保障制度与收入再分配——基于年度收入和终生收入的经验分析

本文利用中国社会科学院经济研究所收入分配课题组1995年和2002年两次城镇居民住户调查数据，从不同的角度分析了中国城镇社会保障制度在收入再分配方面发挥的作用。我们发现总体上中国城镇社会保障制度缩小了个人收入差距，降低了相对贫困率，具有正的再分配效应。但社会保障对劳动年龄人群和老年人群的收入再分配作用非常不同，社会保障的再分配主要不是通过收入阶层间的再分配，而是通过代际间的收入再分配实现的。高收入人群通过社会保障体系转移出去的收入很少，中国社会保障费用负担的累进性很低。另外，与1995年相比，2002年时社会保障缩小收入差距的作用下降，相对贫困率有所上升。我们还发现从劳动年龄人群代际内的收入转移看，以终生收入为基础估计的养老保险制度的长期收入再分配效应大干以年度收入为基础估计的当期再分配效应，机关和事业单位人员是否实行改革后的养老保险方案对整个养老保险制度的长期收入再分配效应的影响非常大。     

DISTRIBUTION DYNAMICS AND CONVERGENCE AMONG 75 CITIES AND COUNTIES IN YANGTZE RIVER DELTA IN CHINA: 1990–2005

This paper applies the distribution dynamics method to study the per capita income disparity from 1990 to 2005 among the 75 cities and counties in the Yangtze River Delta (YRD). The main conclusions are as follows: Firstly, the distribution of per capita income across the YRD has changed from being bi‐modal to being positively skewed over the period 1990–2005; the income disparity lessened in the 8th Five‐Year Plan, increased in the 9th Five‐Year Plan, and then reduced again somewhat in the 10th Five‐Year Plan. Secondly, the main contribution to disparity comes from the intra disparity of the Jiangsu region which is bi‐modal over the period. Thirdly, the rich and poor cities developed independently and steadily at different speeds. Fourthly, convergence in the YRD is caused by the decline of the rich cities rather than progress by the poor cities. Finally, there is relative independence in the region's development, but over the long‐term, the YRD indicates a trend of convergence.     

House Price Dynamics in Mumbai, 1989–1995

The objective of this paper is to study the importance of price index methodology to analyzing intra-metropolitan house price variations in Mumbai. Two hedonic regression-based approaches – cross section and explicit time variable – are compared. The results indicate conclusively that the former is better than the latter. This paper also contributes to the literature on intra-metropolitan house price variations by explaining them based on urban development, population and employment patterns in Mumbai.     

A Theoretical Analysis of Liner Shipping Conferences and Strategic Alliances

We analyze the economic impacts of industrial organizational struggles on the international liner shipping market. Operating ratios of different markets are discussed by incorporating rate, service level, and other variables into a standard microeconomic model. If two different carriers agree on a shipping conference price and/or share a strategic alliance service level, and maximize consolidated profit, a member carrier finds it easier to make its operation profitable than the individual profit optimization case; other carriers are worse off in becoming profitable. If the carriers face inelastic demand, the price continues rising until demand becomes elastic enough for the equilibrium to be relevant. The conference is expected to play a coordination role so that the market does not become unsustainable in the adjustment process to reach equilibrium.