CIRJE Conferences 1999

NBER-TCER-CIRJE Japan Project Meeting
(NBER/TCER/CIRJE)

  • Organizers:
    Fumio Hayashi (CIRJE, University of Tokyo)
    Anil Kashyap (University of Chicago)
  • December 15 (Wed.), 1999
  • at International House of Japan, Tokyo, Japan

There is a group of economists affiliated with National Bureau of Economic Research (NBER) doing research on the Japanese economy. The CIRJE co-organized 1999 annual meeting which was held at the International House in Roppoingi, Tokyo. Five NBER economists presented their empirical work on Japan. Dozens of Japanese scholars participated. Prof. Anil Kashyap of University of Chicago and Prof. Fumio Hayashi were the co-organizers.

PROGRAM

Time Presenter Title Discussant
9:00am - 10:15 am Heather Berry
Mariko Sakakibara (UCLA) 		"Resource Accumulation and Overseas Expansion by Japanese Multinationals: An Empirical Analysis of the Internalization Theory" Kyoji Fukao
（Hitotsubashi Univ.）
<Abstract>
This paper explores two issues: first, the evolution of the value of multinationality to shareholders as a firm's level of international activity and changes; and second whether the accumulation of a firm's intangible assets actually precedes its investment abroad, as implied by the internationalization theory. We analyze these issues in a dynamic context using a sample of 141 Japanese manufacturing firms over a twenty-four year period (1974-1997). The empirical results reveal that shareholder valuation of FDI changes as the level of a firm's international activity changes. Further, our result that intangible assets Granger cause FDI provides support for the internalization theory.
<Discussion>
The comment from the discussant is whether the number of subsidiaries is an appropriate measure for FDI and that the influence of anti-dumping cases should be considered. An author replied that the number of employees in subsidiaries did not change so much and rather stable, and that anti-dumping cases seemed not be significant at firm level.
10:45am -
12:00 pm		 Pinelopi Goldberg
(Columbia Univ./NBER)
Michael Knetter
(Dartmouth College/NBER) 		"International Rivalry in the Imaging Industry: Kodak v. Fuji" David Weinstein
（Univ. of Michigan/NBER）
<Abstract>
This paper is a case study of the changing nature of international competition within the imaging industry. We use a variety of data sources to investigate whether and how competition in the consumer and commercial imaging business has changed in recent years. Exogenous fluctuations in real Yen/＄ exchange rate, which generate changes in the relative cost of production between Kodak and Fuji, are the main mechanism for identifying the degree of competition. We find evidence that Fuji has gained market power over time in the industry. Most indicators point to a corresponding decline in Kodak's market power and an increases in Kodak's sensitivity to relative cost changes vis-a-vis Fuji.
<Discussion>
The discussant questioned what time dummies mean if there is different exchange rate shock on yen/mark and yen/dollar. One of the authors replied that they captured the effect of exchange rate variation on export price variation on average by separating cost effect from destination effect and mark-up variation.
1:15pm -
2:30 pm		 Hiroshi Ono
(Stockholm School of Econ.) 		"Does Examination Hell Pay Off? The Cost-Benefit Analysis of College Education in Japan" Naohiro Yashiro
（Sophia Univ.）
<Abstract>
The obsession over college prestige and the highly competitive environment of college entry in Japan suggest that college equity plays a significant role in how individuals prepare for college. College-bound high school students undergo examination hell, and typically over thirty percent will choose the ronin option, in which they spend years in addition to high school preparing for the next year's college entrance examinations. The pursuits of college quality can thus be captured as differential investments in human capital. Some persons invest in college quality more than others because they believe that these investment will be realized through higher returns.
Using the more scores of the entrance examinations of the colleges attended as a measure of college quality, my analysis finds that college quality significantly improved the internal rate of return (IRR) among the sample of male college graduates in Japan. Moreover, my results suggest that ronin has no direct impact on earnings in and of itself, but only as an indirect effect through its improvement in the quality of the college attended. My results also shows that the IRR with respect to ronin is one of diminishing returns. While the improvement in college quality from ronin must increase at an increasing rate (since the marginal cost of ronin increases at an increasing rate), in reality this improvement increases at a decreasing rate. On average, the number of ronin years which maximizes the IRR is found to be somewhere between one ad two years.
<Discussion>
The discussant's comment pointed out that some factors such as firm size and occupation was taken into consideration as determinant of individual wage profile. The discussant considered non-monetary element like "prestige" was also important. The author explained what firm size works for was different distributional effect and replied that non-monetary elements were difficult to be quantified.
2:45pm -
4:00 pm		 Joe Peek
(Boston College)
Eric Rosengren
(Federal Reserve Bank of Boston)		 "Have Japanese Banking Problems Stifled Economic Growth?" Makoto Saito
（Osaka Univ.）
<Abstract>
A traditional "capital crunch," like that experienced in the Unite States in the early 1990's, did not occur in Japan during the period from 1992 through 1998. Poorly capitalized banks did not disproportionately cut back on loans, and overall lending did not decline dramatically. Nonetheless, we find evidence that the banking problems stifled economic growth by misallocation credit, rather than reducing over credit. Just as the banks were slow to restructuring, bank support for troubled and noncompetitive firms prevented the needed restructuring of non-financial firms from occurring. Thus, the strong borrower-lender relationships in Japan insulated Japanese firms and prevented a capital crunch, but nonetheless stifled economic growth by allocating an increasing share of bank credit to sectors of the economy least likely to use it productivity.
<Discussion>
The comment from the discussant was whether the relation between large companies and large banks is appropriate object to argue about Japan's credit crunch in 1990s. An author mentioned that it is difficult to collect the data about small and medium companies. One suggestion on this is that the data at bank level may solve the problem.
4:30pm -
5:45 pm		 Jun-Koo Kang
(Michigan State Univ.)
Anil Shivdasani
(Univ. of North Carolina)
Takeshi Yamada
(Hong Kong Univ. of Science and Technology)		 "The Effect of Bank Relations on Investment Decisions: An Investigation of Japanese Takeover Bids" Takeo Hoshi
（UCSD/TCER）
<Abstract>
We study 154 domestic mergers in Japan during 1977 to 1993. In contrast to U.S. evidence, mergers are viewed favorably by investors of acquiring firms. We document a two-day acquirer abnormal return of 1.2 percent and of 5.4 percent for the duration of takeover. Announcement returns display a strong positive association with the strength of acquirer's relationships with banks. The benefits of bank relations appear to be greater for firms with poor investment opportunities and when the banking sector is healthy. We conclude that close ties with informed creditors, such as banks, facilitate investment policies that enhance shareholder wealth.
<Discussion>
The discussant provided comments that the role of main bank was not limited to loan lenders, but also shareholder and so on. It was also pointed out that some merger cases were encouraged from the viewpoint of governmental policy interest. An author mentioned that several aspects of main banks were omitted from earlier version of the paper for lighting up its object and their sample includes scarce cases influenced by government.
5:45 pm - Ajourn
6:15 pm - Group Dinner Dining Room, International House of Japan

The First TCER-CIRJE Macro Conference
(TCER /CIRJE)

  • Organizers:
    Fumio Hayashi (CIRJE, University of Tokyo)
    Charles Yuji Horioka (Osaka University)
  • September 11(Sat.), 1999
  • at Sanjo Conference Hall

The first TCER (Tokyo Center for Economic Research) - CIRJE conference on macroeconomics was held at the University of Tokyo on September 11, 1999. The aim of the conference series is to stimulate and promote empirical research on the Japanese economy. More than 30 economists, from universities, government institutions, and think tanks, participated. Six papers were presented. They focused on various aspects of the Japanese economy, including household saving, monetary policy, and the accuracy of consumer price index. Prof. Fumio Hayashi and Prof. Charles Yuji Horioka organized the conference.

PROGRAM

Time Presenter Title Discussant
9:30am - 10:30 am Keiko Shimono
(Nagoya City U.)
Hideaki Otsuki
(Nanzan U.)
Miho Ishikawa
(Imai Accounting Group)		 "Estimating the Size and Distribution of
Bequests in Japan"		 Yukinobu Kitamura
（Hitotsubashi Univ.）
10:45am - 11:45am Nobuko Nagase
（Ochanomizu Univ.）		 "Experiments with Matched Sample Drawn
from Different Sources: Costs of Children
on the Effect on Family Structure of
Asset Formation and Wife's Employment Status"		 Fumio Ohtake
（Osaka Univ.）
11:45am - 1:00pm Lunch at Sanjo Conference Hall
1:00pm - 2:00pm Miki Kohara,
Fumio Ohtake,
Makoto Saito
(Osaka U.) 		"A Test of Full Insurance Hypothesis:
The Case of Japan"		 Fumio Hayashi
（Tokyo Univ.）
2:00pm - 3:00pm Atsushi Maki
(Keio U.) 		"The Statistical Price Index as an Approximation of
the Constant-Utility Price Index:
An Empirical Analysis using Japanese Data-Sets"		 Shigenori Shiratsuka
（Bank of Japan）
3:15pm - 4:15pm Ryuzo Miyao
(Kobe U.) 		"The Effects of Monetary Policy in Japan:
A Tentative Assessment"		 Tsutomu Watanabe,
Masato Tanaka
（Hitotsubashi Univ.）
4:15pm - 5:15pm Etsuro Shioji
(Yokohama Nat'l U.) 		"Public Capital and Regional Output Dynamics:
A US-Japan Comparison"		 Shin-ichi Fukuda
（Tokyo Univ.）
6:00pm- Dinner

Social Security Reform in Advanced Countries
(CIRJE Conference)

  • Organizers:
    Toshiaki Tachibanaki (CIRJE/Kyoto University)
    Toshihiro Ihori (University of Tokyo)
  • September 6, 7, 1999
  • Sanjo Conference Hall, University of Tokyo

The Center for International Research on the Japanese Economy (CIRJE) held an international conference on social security reform in advanced countries, on September 6-7, 1999 in Tokyo, JAPAN. Prof. Toshihiro Ihori (University of Tokyo) and Prof. Toshiaki Tachibanaki (Kyoto University) were the organizers.
The conference was aimed at investigating and discussing various issues of social security reform which takes place in many advanced countries under the condition that many countries suffer from the deteriorated financial budget in social security due largely to aging population. Both theoretical (i.e., normative) papers and empirical studies for North America, Europe and Japan were collected, and various issues were discussed extensively and constructively among invited participants based on these papers. We plan to publish the papers presented at the conference as a form of a book.

Part One
Chair: Tatsuo Hatta (Center for Spatial Information Science, University of Tokyo)

Time Presenter Title Discussant
10:10am -
11:10 am		 Kai A. Konrad
(Free University of Berlin)		 "Geography of the Family" Yasuo Maeda
(Osaka University)
11:10am -
12:10 pm		 Hideki Konishi
(Tokyo Metropolitan University)		 "Public Pension Reforms and Welfare in an Economy with Adverse Selection" Koichi Koyama
(Hokkaido University)


Part Two
Chair: Toshihiro Ihori (Faculty of Economics, University of Tokyo)

Time Presenter Title Discussant
13:30am -
14:30 pm		 Olivia Mitchell
(University of Pennsylvania)		 "Managing Pensions in the 21st Centry: Design Innovations, Market Impact, and Regulatory Issues for Japan" Noriyuki Takayama
(Hitotsubashi University)
14:30am -
15:30 pm		 Mats Persson
(Stockholm University)		 "Five Fallacies in the Social Security Debate" Hiroshi Yoshida
(Tohoku University)
15:50am -
16:50 pm		 Toshiaki Tachibanaki (Kyoto University) "Integration of Social Security and Tax Systems" Yukinobu Kitamura
(Hitotsubashi University)
16:50am -
17:50 pm		 Ashwin Kumar (Department of Social Securities, U.K. Government) "Pension Reform in the UK: from Contribution to Participation" Naohiro Yashiro
(Sophia University)
Summary


September 7

Part Three
Chair: Hiroshi Yoshikawa (Faculty of Economics, University of Tokyo)

Time Presenter Title Discussant
9:30am -
10:30am		 Gary Burtless
(The Brookings Institution)		 "Social Security Privatization and Financial Market Risk: Lesson from U. S. Financial History" Tetsuo Fukawa
(National Institute of Population and Social Security Research)
10:30am -
11:30am		 Erik Hernes
(University of Oslo)		 "Early Retirement and Economic Incentives among Married Men" Atsushi Seike
(Keio University)
11:50am -
12:50am		 Tatsuo Hatta
(University of Tokyo)		 "Switching the Japanese Social System from Pay as You Go to Actuarially Fair: A Simulation Analysis" Eiji Tajika
(Hitotsubashi University)


Part Four
Chair: Akiyoshi Horiuchi (Faculty of Economics, University of Tokyo)

Time Presenter Title Discussant
14:30am -
15:30am		 Toshihiro Ihori
(University of Tokyo)		 "Pension Contributions and Capital Accumulation under Modified Funded System" Fumio Ohtake
(Osaka University)
15:30am -
16:30am		 John Piggott
(The University of South Wales)		 "Private Mandatory Retirement Provision: Design and Implementation Challenges" Yasushi Iwamoto
(Kyoto University)

1999 The Sixth Mitsui Life Symposium on
Economic Freedom and Development

  • (Mitsui Life Financial Research Center at the University of Michigan Business School/
    Co-sponsored by CIRJE)
  • Organizers: Takaaki Wakasugi (University of Tokyo)
    E. Han Kim (University of Michigan)
    David Weinstein (University of Michigan)
  • June 16,17, and 18
  • Meeting Room on the 8th floor of the Economics Research Building, University of Tokyo

About sixty people including speakers and commentators participated and developed discussions this year. This conference is a regular activity of the University of Michigan Business School's Mitsui Life Financial Research Center, and the first output of the memorable cooperation betwenn the Center with CIRJE.

PROGRAM

Wednesday, June 16th

Preliminary Meeting and Dinner Palace Hotel


Thursday, June 17th

Location at The University of Tokyo
Participants will depart for the Univesity of Tokyo
Welcoming Remarks by Professor Tak Wakasugi and David Weinstein
Surgit Bhalla "Hayek Reconsidered: Economic Freedom is it!"
Yingyi Qian "The Road to Economic Freedom, Chinese Style"
Lunch --- University of Tokyo
Travel to Keidanren Kaikan
Welcome Remarks
Keynote Speech by Jagdish Bhagwati
Q and A
Dinner


Friday, June 18th

Location at the University of Tokyo
Shang-Jin Wei "Corruption in Economic Development: Beneficial Grease, Minor Annoyance, or Major Obstacle?"
E. Han Kim
Vijay Singal		 "Open Capital Markets and Corporate Governance"
Lunch --- University of Tokyo
Peter Rosendorff "Do Democracies Trade More Freely?"
David Henderson "Let Capital Flow Freely"
Summary by David Weinstein
Dinner