Antonio Fatás, 16 June 2018

Koji Ito, 03 June 2018

Support for ‘anti-globalist’ policies across the developed world suggests that many people are concerned about the impact of globalisation on employment and wages. This column examines the wage premium for exporting among firms in Japan, using linked employer-employee data to control for other factors that may affect wages. Exports and wages clearly are correlated in Japan’s manufacturing sector, especially for smaller-scale plants and firms. 

Keiichiro Kobayashi, 05 May 2018

Future generations cannot influence current policies, while today’s policymakers and voters tend to be focused on the present. Understanding how to reconcile this disconnect is important for resolving intergenerational issues such as sustainability and swelling government debt. This column introduces the interdisciplinary field of ‘future design’ and discusses insights from a recent workshop held at the Research Institute for Humanity and Nature in Japan. It also proposes several directions for future design research.

Masayuki Morikawa, 31 March 2018

The Japanese economy is suffering its worst labour shortage since 1992. This column explores the impact of this shortage, in light of the past five years’ economic expansion. The main effect has been a decline in the quality of goods and services, which translates into increases in true prices. Going forward businesses should start differentiating their goods and services to capture the growing diversity of consumers’ willingness-to-pay.

Atsushi Nakajima, 27 March 2018

As the global economy continues to recover, trade frictions between advanced and emerging economies have started to appear. This column considers how Japan can continue its recent trend of economic expansion by addressing domestic growth opportunities while remaining resilient to international trade challenges. Both technological innovation and new business models are key to achieving this.

Hiroyuki Nakata, 22 March 2018

Many advanced economies are facing the twin challenges of an ageing population and public hostility towards immigration. This column studies the impact of demographics on attitudes towards immigration in Japan, and the effectiveness of information campaigns explaining the benefits of immigration. It finds that information campaigns are effective in improving attitudes towards immigration, especially amongst women. Deep generational gaps in attitudes towards immigration may be caused by younger men in particular viewing immigrants as potential competitors.

Tadashi Ito, Ryohei Nakamura, Manabu Morita, 13 February 2018

For regional firms to survive, they need to find export markets using wholesalers as intermediaries. This column uses a dataset of export activity in Japan to show that this type of indirect export activity occurs predominantly from metropolitan areas, with the probability of direct exports negatively correlated with the distance between manufacturer and wholesaler. Wholesaler productivity (though not manufacturer productivity) was correlated with the probability of these indirect exports, suggesting that wholesalers search for suitable manufacturers, but not vice versa.

Koji Ito, Ivan Deseatnicov, Kyoji Fukao, 23 January 2018

The study of global value chains has become increasingly relevant as production becomes more and more fragmented across countries. This column uses evidence from Japan to evaluate recent theories that such chains have caused some of the country’s industries to become less competitive. The findings suggest that considering production for exports and domestic sales separately may provide a more complete picture of firm heterogeneity within industries, and a more complete picture of interconnected countries at the industry level.

Atsushi Ohyama, 14 December 2017

The length of time industries prosper varies significantly. This column examines why some industries grow and prosper for a long period of time through the lens of submarket creation and destruction. Using data from the Japanese Census of Manufacture, it shows that the creation and the destruction of products allow an industry to continue attracting new entrants, that start-up and spinoff firms are more likely to enter a newly created submarket than incumbent firms, and that new entry is encouraged when unrealised business opportunities are reallocated smoothly.

Shujiro Urata, Atsuyuki Kato, 01 December 2017

Many governments have engaged in free trade agreements to facilitate the growth of regional production networks and global value chains, but critics argue that such agreements damage domestic industries. This column uses Japanese evidence to show that free trade agreements can increase the significance of the domestic industry in a country’s supply chain networks through intra-firm trade, and restrain the hollowing-out of the domestic industry.

Ayako Kondo, 21 November 2017

Economists have studied extensively the direct impacts of natural disasters on local labour markets, but less is known about the knock-on consequences for wider markets. This column argues that although supply chain disruptions caused by the Great East Japan Earthquake increased job separation and geographical shifts, the effects on employment status were weak. The long-run impact of the earthquake on the labour markets outside of the directly affected areas appears to be limited, despite public concerns at the time.

Ryoko Ueda, Keiichiro Kobayashi, 18 November 2017

Strategic shareholding – companies holding minority shares in other companies for the sake of business relations – can be used for anticompetition purposes or to reduce pressure from shareholders. This column explores strategic shareholding in Japan. Roughly one third of shareholders are found to be strategic, with three quarters of these being business corporations. However, in Japanese corporate culture it is not uncommon for such shareholding to occur as part of technical or business partnerships without affecting managerial independence.

Kaoru Hosono, Daisuke Miyakawa, Miho Takizawa, 12 November 2017

Several studies have examined the profitability and productivity of foreign subsidiaries, but less is known about the determinants of success. This column looks at the contribution of resources from 3,800 Japanese parent firms to the business activities of their 20,000 overseas subsidiaries. The results suggest a positive contribution of parent firms’ intangibles to subsidiaries’ production, in particular for smaller subsidiaries.

Masayuki Morikawa, 21 October 2017

Studies predicting a substantial impact of the 2020 Tokyo Olympic games on the Japanese economy have tended to overlook substitution effects in spending as well as the characteristics of those who are expected to increase their spending. This column uses a survey of 10,000 consumers across Japan to examine the net impact on consumer spending. While the majority expect no significant change in their consumption expenditures, a greater share of respondents expect a net increase than a net decrease. In general, people in their 20s and 30s, high-income earners, those with higher educational attainment, and households with at least one pre-school child expect a net increase in consumption expenditures.

Sayuri Shirai, 06 October 2017

Interest rates in many advanced economies have been declining since the 1990s. This column takes a close look at the case of Japan. In 2013 the Bank of Japan pursued a policy of quantitative and qualitative monetary easing that aimed to lower the real interest rate substantially below its natural rate. The evidence suggests that this policy has had mixed success at best, and that the natural rate of interest may decline in the foreseeable future.

Antonin Bergeaud, Gilbert Cette, Rémy Lecat, 04 September 2017

Over the 20th century, GDP growth was mainly driven by total factor productivity growth. Since the mid-2000s, however, productivity growth has been in decline. This column explores the history and future of growth focusing on four developed economies: the US, the Eurozone, the UK, and Japan. Simulated scenarios for the 21st century show a wide range of potential growth outcomes, dependent on whether total factor productivity growth stays indefinitely low, and whether the digital economy delivers a new productivity growth wave.

Tomoya Mori, 25 August 2017

The population sizes of cities are highly indicative of their industrial structure. This column identifies the cities in Japan in which manufacturing industries have significant agglomeration, and reveals that the number of these agglomeration cities differs widely across industries, with industries that are located in a smaller number of cities being found in larger cities. There is also considerable churning of population and industrial activities among Japanese cities, with population growth reflecting the development of highway and high-speed railway networks.

Sayuri Shirai, 31 July 2017

Portfolio rebalancing through large-scale asset purchases is one of the major transmission channels under the zero lower bound. This column assesses whether the channel has been effective in Japan, focusing in turn on financial institutions, firms, and households. Japanese firms and households are notoriously risk averse, limiting the effectiveness of the portfolio rebalancing channel. These results suggest that more drastic structural reforms and growth strategies are needed.

Keisuke Kondo, 23 July 2017

The large literature on agglomeration economies attests to the higher average productivity of firms in larger cities. However, this literature focuses on positive externalities, and a second potential mechanism – selection against less productive firms – has received little empirical attention. This column explores how these two mechanisms contribute to higher productivity in Japanese cities. Consistent with earlier work considering the case of France, no evidence for a selection effect is found.

Hiromi Hara, 19 July 2017

Although the gender wage gap in Japan has been decreasing over the last 15 years, it remains large. This column shows that both the ‘glass ceiling’ and the ‘sticky floor’ exist in the Japanese labour market. The country’s human resource management system and a culture which rewards those who are willing to work outside of regular hours are to blame.

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