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This article presents the methodology to examine the impact of foreign ownership on firm productivity using firm-level data of Japanese manufacturing firms from 2000 to 2016, which include 1,458 listed companies in Japan. Firm productivity is represented by total factor productivity (TFP), which is estimated by the Olley–Pakes semiparametric estimation method to minimize the simultaneity problem in production function estimation. In the estimation of the impact of foreign ownership on firm productivity, system GMM estimation is applied to address a possible reversal causality problem between foreign ownership and firm productivity. Based on the case of the manufacturing firms in Japan, this article shows that 1 percentage point increase in foreign ownership increases the firm productivity by 0.06 percent. The evidence of this article supports the positive impact of foreign ownership on firm productivity and further implies that the promotion of foreign investment could be a policy option to improve firm productivity. This study analyzes the impact of foreign ownership on firm productivity. Firm-level data of the Japanese manufacturing firms from 2000 to 2016 are analyzed. The result supports the positive impact of foreign ownership on firm productivity. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

There are inconclusive findings on the causal effect of land reform and its crucial channels in the development economics literature. One challenge is to separate the channels, through which land rights operate. This study examines the impact of redistributive land reform in post–World War II Japan on agricultural productivity and investments. This reform imposed a ceiling on landholdings, redistributed above‐ceiling farmland from landlords to tenants, and severely restricted the transferability of redistributed farmland. Thus, we can focus on the tenure security effect (not the tradability and pledgeability effects) as one probable channel. Using rice‐farm panel data before and after the reform (i.e., 1947 and 1948), we exploit the variation in the reform implementation across tenants. The land reform had little effect on total factor productivity and investment in the subsequent season. Our results suggest that the security dimension of land rights alone does not increase short‐run agricultural productivity. [ABSTRACT FROM AUTHOR]

We identify and measure two impacts of industry-level total factor productivity (TFP) growth on aggregate price change in the U.S. and Japan. The first is a standard effect from the definition of aggregate GDP. TFP change lowers aggregate prices ceteris paribus. The second is that a change in TFP in the production of investment goods lowers the cost of capital via lower investment prices. We call this the cost-of-capital effect and formulate an expanded growth accounting framework to capture both effects. We apply it to a harmonized dataset for the two countries and find that the standard effect has fallen since the peak around 2000 due to lower TFP growth and a diminished share of GDP. However, the cost-of-capital effect has risen in importance and offsets part of this decline in the standard effect. • TFP growth in Computer equipment contributes to aggregate TFP growth • This contribution is high in US and Japan, but decelerating since 2004 • Identify how TFP in computers lowers asset prices and cost of capital • Cost-of-capital effect lowers aggregate prices (GDP deflator) • Cost-of-capital effect is rising since 2004 [ABSTRACT FROM AUTHOR]

With Japan's declining population, improving productivity is important to achieving continuous regional economic growth. This study focuses on the regional effects of population agglomeration and accessibility on total factor productivity (TFP). Empirical analysis shows that population agglomeration contributed to TFP growth, most significantly in the Greater Tokyo area. The interaction (flow) of people was examined and the importance of high-speed transportation network for TFP growth was clarified as the effect of accessibility on TFP growth. Population agglomeration and the development of transportation network are thus important strategies for growing regional economies. [ABSTRACT FROM AUTHOR]

We calculate partial factor productivity and total factor productivity (TFP) indices for rice production using panel data across 42 Japanese prefectures from 1996 to 2006, and perform panel unit root tests of TFP convergence across prefectures. We find that during this period, the partial factor productivity growth rates for capital, land and materials stagnated at the aggregate national level, as did the TFP growth rate, despite a large increase in labor productivity. We also identify evidence of a convergence in TFP across Japanese prefectures. [ABSTRACT FROM AUTHOR]

The paper shows that, if the OLS method is used, the features of substitution between the considered production factors have an important impact on the estimated parameters of the Cobb-Douglas production function with constant returns to scale and disembodied technical change as well as on the dynamics of the total factor productivity. The author reveals the dual nature of the above-mentioned production function and identifies all the possible correlations of the estimated parameters when productivity of labour tends to grow in the long run. A special attention is paid to the possible occurence of harmful collinearity. The author reveals that the occurence of the respective type of collinearity type is dependent on the feature of the dynamics of productivity of the substituting production factor. Consequently, an extended estimation methodology is proposed in order to reveal the feature of the production factors substitution, the form of the trajectory o f thedynamics of the partial productivity of the considered production factors and the impact of colinearity on the estimated parameters. This methodology is practically used by considering the evolution of Japan's economy during the 1971-1986 period. [ABSTRACT FROM AUTHOR]

In this paper, we investigate why information and communication technology (ICT) investment in Japan has stagnated since the 1990s. Given that a notable characteristic of Japan’s economy is that small as well as older firms play a much greater role than in other economies, particularly the United States, our analysis mainly focuses on firms’ size and age. As a first step of our investigation, using firm-level data, we examine whether larger and/or younger firms tend to have a higher ICT intensity. We find that larger firms indeed have a higher ICT intensity. In the case of firm age, there was no simple linear relationship between firm age and ICT intensity. As a next step, we estimate a Cobb–Douglas type production function and test whether the ICT input coefficient differs across different firm-size groups and firm-age groups. We find that larger firms and younger firms tend to have a higher ICT input coefficient. Another factor that may be responsible for differences in ICT intensity by firm size and firm age is constraints on ICT input. To check whether this is the case, we calculate the marginal product of ICT input by firm-size group and firm-age group using the production function estimates. We find that smaller firms and younger firms tend to have a higher marginal product of ICT input. These findings suggest that smaller firms and younger firms face constraints that prevent them from increasing ICT input. We also examine impediments to the full use of ICT by Japanese firms, based on our analysis as well as preceding studies. We find that to enhance ICT input, the government should develop the market for business process outsourcing, which includes outsourcing of ICT processes, and resolve the scarcity of ICT experts, by supporting the training of ICT experts at universities and making it easier for foreign ICT experts to work in Japan. [ABSTRACT FROM AUTHOR]

I examine the Koizumi Junichiro era in Japan to derive lessons for the current Abe Shinzo administration that vows to get Japan back on the path o f sustainable growth. Standard growth theory identifies total factor productivity (TFP) as the key to sustainable growth. The existing empirical evidence clearly indicates that economic recovery during Koizum's tenure was accompanied by robust growth of TFP To account for this improvement in TFP performance, I focus on three developments during Koizumi's term: promotion o f competition by introducing market discipline to various sectors o f the economy, effectiveness o f market entry and exit, and use o f foreign competitive pressure to enhance domestic efficiency. [ABSTRACT FROM AUTHOR]

Using industry- and micro-level data, this paper examines why Japan's productivity growth has been slow for such a long time and how it can be accelerated in the future. Japan's capital-gross domestic product ratio continued to increase after 1991, and this increase in the capital-gross domestic product ratio must have contributed to the decline in the rate of return on capital in Japan by decreasing the marginal productivity of capital. On the other hand, Japan's accumulation of information and communication technology capital and intangible investment was very slow. Compared with large firms, which enjoyed an acceleration in the total factor productivity growth in recent years, Japanese small- and medium-sized enterprises were left behind in information and communication technology capital and intangible investment, and their productivity growth has been very low. Furthermore, as large firms expanded their supply chains globally and relocated their factories abroad, research and development spillovers from large firms to small- and medium-sized enterprises seem to have declined. [ABSTRACT FROM AUTHOR]

Recent developments in the literature on Employment Protection Legislation (EPL) have revealed that changing the stringency of employment protection can lead to extensive consequences outside the labour market, by affecting firms’ production decisions or workers’ commitment levels. This article provides the first empirical evaluation of the comprehensive effect of restrictions on firing employees in Japan, by exploiting the variations in court decisions. We find that judgements lenient to workers significantly reduce firms’ total-factor productivity growth rate. The effect on capital is mixed and inconclusive, although we obtain modest evidence that an increase in firing costs induces a negative scale effect on capital inputs. [ABSTRACT FROM PUBLISHER]

This paper examines the economic impact of re-invention – the degree to which an innovation is modified by user – on industry growth and productivity. The paper focuses on two re-inventions made by a Japanese steel company; these inventions improved the productive efficiency of Austrian-made refining technology, namely basic oxygen furnace (BOF). Results obtained from the plant-level production function estimation indicate that re-inventions account for approximately 30% of the total factor productivity of the BOF, substantially promoting the dissemination of the BOF technology. Our simulation analysis indeed reveals that re-inventions contributed to steel output growth by about 14%. This paper also documents that innovating companies played the role of a ‘lead user’ in developing and disseminating their re-invented technologies. [ABSTRACT FROM PUBLISHER]

This paper examines the decade-long economic slump in Japan during the 1990s. In the neoclassical growth framework, a fall in total factor productivity growth is expected to slow down the economy's long-term growth. This paper's findings based on the Malmquist index show that Japan's productivity growth rate in the 1990s is not only historically low but also lags considerably behind the contemporaneous growth rates in other OECD nations. Building upon the Japanese experience, this paper considers policy responses to the current global financial crisis. [ABSTRACT FROM AUTHOR]

In this paper, we present international comparisons of potential output growth among several economies—Canada, the euro area, France, Germany, Italy, Japan, the Netherlands, the United Kingdom, and the United States—for the period 1991–2004, for which we construct consistent and homogenous capital stock series. The main estimates rely on a structural approach where output of the whole economy is described by a Cobb–Douglas function and Total Factor Productivity (TFP) is estimated allowing for possible breaks in the deterministic trend. The results confirm that over the considered period the potential gross domestic product growth has been faster in the United States than in other studied countries, reflecting a combination of higher labour contribution and faster TFP growth. Overall, this paper might help to shed some light on cross-country differences in economic performance over the recent period. [ABSTRACT FROM AUTHOR]

Abstract: Nishimura et al. [Nishimura, K.G., Nakajima, T., Kiyota, K., 2005. Does the natural selection mechanism still work in severe recessions? Examination of the Japanese economy in the 1990s. Journal of Economic Behavior and Organization 58, 53–78] analyze the entry/exit behavior of Japanese firms during the 1990s and find that relatively efficient firms exited while relatively inefficient firms survived during the banking-crisis period of 1996–1997. They conclude that the natural selection mechanism (NSM) apparently malfunctions during severe recessions, but we offer a more plausible interpretation: NSM continued to function effectively even during this period, but aberrant banking practices caused a shift in the type of natural selection from directional to disruptive selection, with the most efficient as well as the least efficient firms being favored and firms of intermediate efficiency being selected against. [Copyright &y& Elsevier]

This paper examines the relationship between exports, foreign direct investment, and firm productivity. Using longitudinal panel data on Japanese firms, it is found that the most productive firms engage in exports and foreign direct investment, medium productive firms engage in either exports or foreign direct investment, and the least productive firms focus only on the domestic market. Moreover, exports and foreign direct investment appear to improve firm productivity once the productivity convergence effect is controlled for. Firms that retain a presence in foreign markets, either by exports or foreign direct investment, show the highest productivity growth, which contributes to improvements in national productivity. [ABSTRACT FROM AUTHOR]

As aviation demand increased constantly along with the rapid economic growth in Japan and surrounding East Asian countries over the last several decades, Japanese government promoted airport construction since 1950s. However, the recent change in the economic background has made rise to a criticism toward the inefficient public investment, especially the transportation infrastructure. In this criticism, it has been argued that some of the small regional airports are indeed suffering the issue of overinvestment. Thus this paper attempts to verify the validity of such criticism by statistically measuring the efficiency of Japanese airports and conducting comparative analysis. For this objective, the paper employs two distinct methods namely data-envelopment analysis and endogenous-weight TFP methods. The results from these methods consistently indicates that the efficiency of regional airports in mainland Japan are lower than others, and that those airports constructed in the 1990s are relatively inefficient. [Copyright &y& Elsevier]

Recently much attention has been devoted to superlative indexes in the context of the national accounts. In this paper we advocate the use of the implicit Tornqvist quantity index to measure real GDP. This index, which has been proposed by Diewert and Morrison (1986), has never received serious consideration in the literature. Yet, compared to the better-known Fisher index, the implicit Tornqvist index of real GDP has a number of advantages. Thus, it can be shown to be exact for the Translog GDP function, it allows for a complete multiplicative decomposition of nominal and real GDP, and it is consistent with state-of-the-art measures of total factor productivity that typically rely on the Tornqvist aggregation. Estimates for a sample of 26 countries are reported. We find that the Laspeyres quantity index still used by the statistical agencies of most countries tends to underestimate real growth. Over the 1960-1996 period, the cumulated shortfall was as much as 13.4% of GDP in the case of Japan. [ABSTRACT FROM AUTHOR]