Japan’s output gap estimation and ℓ 1 trend filtering

This paper estimates Japan’s output gap using the recently developed ? ₁ trend filter, which is an alternative to the popular Hodrick–Prescott (HP) filter. This new filter provides a piecewise linear trend line, which means it possibly provides better output gap estimates than the HP filter does for an economy such as Japan that has experienced some structural breaks.     

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.     

Failure Discrimination and Rating of Enterprises by Semi-Definite Programming

We propose a new method forfailure discrimination and rating of enterprises using financialdata compiled from their balance sheets. No particular distributional assumption is made on the underlying data. Our method automatically discriminates and rates many enterprises using mathematical programming methods. We separate multi-dimensional data byhyperplane and hyper-ellipsoid, so that we can interpretthe results of classification from the geometric point of view. Theproblem to be solved here is a linear programming problem orsemi-definite programming problem which can be solved efficiently byinterior point algorithms. Numerical simulations usingreal data show that hyper-ellipsoid separation generates a result which can be used for practical purposes.     

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.     

Market Size and Firm Location in a Service Industry

This paper investigates the welfare effects of firm location in a service industry. We consider the situation where firms determine their locations in either of two regions with a difference in market size. From the viewpoint of the consumers' welfare, there are too few firms in the large market and too many in the small market. However, from the viewpoint of the producers' and social welfare, the opposite is true. Further, an increase in the difference in market size is unambiguously unfavorable for the producers. On the other hand, such an increase is favorable for the consumers and the economy as a whole.     

Estimates of average marginal tax rates on factor incomes in Japan

In this paper, we estimate average marginal tax rates on factor incomes in Japan from 1963 to 2007. We adapt the method of D.H. Joines [Estimates of effective marginal tax rates on factor incomes. J. Bus. 54 (2), 191-226.] to the Japanese tax and social security system. Average marginal tax rates on labor incomes without social security premiums range from 14% to 21%, whereas the rates on incomes with social security have increased from 21% to 33%. Tax rates on capital incomes have fluctuated between 35% and 58%. We also compare our estimates with average tax rates and the wedges from business cycle accounting.     

Hepatocellular carcinoma: Prospective assessments of the T-factor with CT,US, and MR imaging

The capabilities of computed tomography (CT), ultrasonography (US), and magnetic resonance (MR) imaging were studied in order to determine the role of each of these noninvasive examinations for estimating the T-factor of hepatocellular carcinomas (HCCs). Fifty-one patients with surgically proven HCCs received CT (50 patients), US (46 patients), and MR (44 patients). The images of CT, US, and MR were prospectively evaluated for main tumor size, intrahepatic metastases, and vascular invasion, which compose the T-factor of HCC, and compared to pathological results. The sizes of the main tumor were estimated correctly by all examinations. For estimating intrahepatic metastases, US (74%) and MR (73%) were superior to CT (65%). For estimating portal invasion, CT (79%) was superior to US (70%) and MR (66%), because CT could demonstrate the segmental staining caused by portal invasion. The estimates of hepatic venous invasion were difficult during any of the examinations. We conclude that presurgical evaluations of the T-factor require the use of US and CT or MR and CT.     

Trading and Ordering Patterns of Market Participants in High Frequency Trading Environment: Empirical Study in the Japanese Stock Market

In this study, we investigate ordering patterns of different types of market participants in Tokyo Stock Exchange (TSE) by examining order records of the listed stocks. Firstly, we categorize the virtual servers in the trading system of TSE, each of which is linked to a single trading participant, by the ratio of cancellation and execution in the order placement as well as the number of executions at the opening of the afternoon session. Then, we analyze ordering patterns of the servers in the categories in short intervals for the top 10 highest trading volume stocks. By classifying the intervals into four cases by returns, we observe how different types of market participants submit or execute orders in the market situations. Moreover, we investigate the shares of the executed volumes for the different types of servers in the swings and roundabouts of the Nikkei 225 index, which were observed in September in 2015. The main findings of this study are as follows: Server type A, which supposedly includes non-market making proprietary traders with high-speed algorithmic strategies, executes and places orders along with the direction of the market. The shares of the execution and order volumes along with the market direction increase when the stock price moves sharply. Server type B, which presumably includes servers employing a market making strategy with high cancellation and low execution ratio, shifts its market making price ranges in the rapid price movements. We observe that passive servers in Server type B have a large share and buy at low levels in the price falls. Also, Server type B, as well as Server type A, makes profit in the price falling days and particularly, the aggressive servers in the server type make most of the profit. Server type C, which is assumed to include servers receiving orders from small investors, constantly has a large share of execution and order volume.     

Increasing marginal costs and satiation in the private provision of public goods: group size and optimality revisited

It is widely recognized that the degree of inefficiency in the voluntary provision of a public good increases with the group size of an economy. However, we find that only a slight modification in the conventional assumptions gives rise to a profound difference in outcome. In particular, we show that there is a case where the Nash equilibrium provision and the efficient provision will converge as the size of an economy grows. To show this, we assume individuals face increasing marginal cost of voluntary provision and their preference function has a finite satiety point.      

Credit rationing and implicit contract theory : An empirical study

This paper investigate whether or not implicit contract relations predominate in the Japanese bank loan market and produce equilibrium credit rationing. The empirical evidence suggests that risks are shared between banks and firms through interest rate arrangements. This implies that commercial banks in Japan operate in a market dominated by implicit contract relations. However, the evidence does not support the view that Japanese commercial banks execute credit rationing in the sense of Fried and Howitt (1980). Furthermore, the results show that large banks differ from small banks in the risk consideration of loan contracts. These empirical results are completely consistent with the intermarket business group hypothesis such that the group formation aims to share risks and profits among members.