The relative and incremental explanatory powers of dirty surplus items for debt interest rate

This study investigates the relationship between dirty surplus items on the balance sheet and the cost of debt for Japanese firms. We focus on three dirty surplus items—unrealized gains and losses on available-for-sale securities (SEC), foreign currency translation adjustment (FOC), and land revaluation surplus (LAND). While many previous studies on dirty surplus adopted the value-relevance perspective, we examine the effect of dirty surplus items on the interest rate spread of bonds from the bond market perspective. We use the [Vuong, Q. H. (1989). Likelihood ratio tests for model selection and non-nested hypotheses. Econometrica, 57, 307–333] test to evaluate the relative explanatory power of the equity ratio with and without dirty surplus items for the interest rate spread on bonds issued. We find evidence that the equity ratio with dirty surplus items is more strongly associated with the debt interest rate than that without dirty surplus items. The results suggest that the total amount of dirty surplus items have statistically significant explanatory power for the interest rate spread. However, some dirty surplus items do not have explanatory powers for the bond interest rate spread. While FOC has relative and incremental explanatory powers and SEC has only incremental explanatory power, LAND has neither relative nor incremental explanatory power for the bond interest rate spread. The results mean that FOC and SEC are useful to Japanese bond investors.     

Optimal income taxation with a stationarity constraint in a dynamic stochastic economy

We consider the optimal nonlinear income taxation problem in a dynamic, stochastic environment when the government cannot change the tax rule as uncertainty resolves. Due to such a stationarity constraint, our taxation problem is reduced to a static one over an expanded type space that incorporates type evolution. We strengthen the argument in the static model that the zero top marginal tax rate result is of little practical importance because it only applies to the top of the expanded type space. If the maximal type increases over time, the person with top ability in any period but the last has a positive marginal tax rate.     

The size distribution of ‘cities’ delineated with a network theory‐based method and mobile phone GPS data

We delineate “cities” independent of administrative boundaries in Japan by using a network theory‐based method and GPS‐based human mobility data. We divide the country into approximately 1 × 1 km² cells and detect the partition of cells that is optimal from the perspective of information theory. The resulting groups of cells are specified as cities. We find that the combination of two lognormal distributions better fits the city‐size distribution than a distribution with a Pareto upper tail. Moreover, we show that a jump diffusion process is the stochastic process of the city population underlying such a distribution.     

An Agent that Facilitates Crowd Discussion

Group Decision and Negotiation - Online discussion platforms are perceived as the next-generation method of citizen involvement. Such platforms can collect, integrate, and synthesize opinions to...     

Machine-reeling technology diffusion in early Meiji Japan's silk industry

Using 1880 s panel data from Yamanashi and Gifu prefectures in Japan, we estimated the diffusion factors and total factor productivity (TFP) in machine-reeling technology in Japan's silk-reeling sector. While the cost of distance through the traditional highway from the Shimosuwa-shuk post town in the Nagano Prefecture has a negative correlation with technology diffusion, the correlation of silk production per population is positive. Machine-reeling technology is raw-material-intensive and does not show increasing returns to scale. While the TFP in Yamanashi is higher than in Gifu, machine-reeling output expansion is larger in the latter.