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Despite the recognition that the determinants of exploratory and exploitative innovation differ, whether and how corporate culture affects exploratory and exploitative innovation has not been examined much in the literature. This study aims to fill this gap in the literature and empirically examines the relationship between corporate culture and product innovation using a unique survey of Japanese firms. From the survey, we identify four types of corporate culture in the Competing Values Framework and two types of product innovations (product novelty): explorative innovations (new-to-market products) and exploitative innovations (new-to-firm products). We employ a bivariate probit model to examine the effect of corporate culture on making new-to-market products and new-to-firm products. We find that firms that selected the words "market impact" and "creativity", both of which represent a Create-oriented culture, to describe their corporate culture in the survey are more likely to introduce new-to-market products. In contrast, firms that selected "bottom-up approach", which represents a Collaborate-oriented culture, have a higher likelihood of introducing new-to-firm products. The results suggest that the link between corporate culture and product innovation depends on whether a firm pursues explorative or exploitative innovations. [ABSTRACT FROM AUTHOR]

This article analyzes the change in municipal administrative efficiency in the post-merger period using the data of 92 municipalities in Ibaraki prefecture for the period 1979–2004. For this purpose, the authors employ a nonparametric programming method to compute a data envelopment analysis (DEA)/Malmquist indices (MI). These indices are decomposed into two component measures, namely, catch-up (CU) and frontier shift (FS) indices. The authors found that the administrative efficiency in Ibaraki prefecture in the post-merger period was monotonically regressed; however, the efficiency scores of merging municipalities were found to be higher than those of nonmerging ones. Scale change did not necessarily contribute to an efficiency change in the post-merger period. In the short run, scale affected Tsukuba city, which was formed by consolidating smaller municipalities. [ABSTRACT FROM PUBLISHER]

The Japanese yen is one of the most volatile among developed country currencies. In this paper, we investigate how real effective exchange rate ( REER) uncertainty affects firms' research and development ( R& D) investment, using firm-level panel data for Japanese manufacturing firms for the period 1994-2011. Our results show that firms that are more exposed to REER uncertainty are less responsive to changes in demand conditions. Uncertainty makes firms more cautious when investing, since high uncertainty increases the chances of making a costly mistake. Our finding thus provides evidence of the caution effect of uncertainty. The caution effect also increases the persistence of R& D, implying that R& D investment does not increase much even if firms face favorable demand conditions. Reducing REER uncertainty is important to stimulate R& D investment, especially for firms that are more exposed to international competition and REER uncertainty. [ABSTRACT FROM AUTHOR]