Hyeog Ug Kwon

Why Did Japan's TFP Growth Slow Down in the Lost Decade? An Empirical Analysis Based on Firm-Level Data of Manufacturing Firms

This study analyses the cause of the slowdown in Japan’s TFP growth during the 1990s. Many preceding studies, examining the issue at the macro- or industry-level, have found that the slowdown was primarily due to the stagnation in TFP growth in the manufacturing sector. Using firm level panel data covering the entire sector, we investigate the causes of the TFP slowdown and find that the reallocation of resources from less efficient to more efficient firms was very slow and limited. This “low metabolism” seems to be an important cause for the slowdown in Japan’s TFP growth.

Cross-border Vertical Integration and Intra-firm Trade: New Evidence from Korean and Japanese Firm-level Data

This paper establishes two facts about cross-border vertical integration and intra-firm trade of firms in Korean and Japanese manufacturing industries. First, the intra-firm trade between a parent firm and its affiliates is highly concentrated in a small number of large multinational corporations. Second, the input–output coefficient between the parent firms industry and the affiliates industry is weakly related to the presence and magnitude of intra-firm trade between the parent firm and its affiliates. Furthermore, these two characteristics are also found in domestic vertically integrated firms. In particular, the second point identifies a need for further research on the motivation of cross-border vertical integration between two manufacturers, the final good producers at home and the input suppliers abroad.

Innovation and Employment Growth in Japan: Analysis Based on Microdata from the Basic Survey of Japanese Business Structure and Activities

This study, using microdata from the Basic Survey of Japanese Business Structure and Activities, empirically examines the relationship among innovation, labour hoarding and employment growth at Japanese firms from 1991 to 2010. The main findings are as follows. First, the labour force of many firms in Japan is above the optimal level (labour hoarding). Second, labour hoarding is more serious among larger firms. Third, firms do not adjust employment instantaneously; if they have surplus labour in the current period, they will gradually reduce it. This is consistent with the theoretical model on employment adjustment that we propose. Fourth, all else being equal, firms’ conducting R&D are more likely to increase employment. Fifth, while we observe a negative correlation between firms’ total factor productivity growth and employment, total factor productivity growth through innovation has a positive impact on employment. Finally, in the manufacturing sector, product innovation, which we proxy by R&D expenditure, has a positive impact on employment, while in the nonmanufacturing sector, process innovation, which we proxy by capital investment, has a positive effect on employment.

E-commerce and Employment Growth in Japan: An Empirical Analysis Based on the Establishment and Enterprise Census

This study, using microdata from the Establishment and Enterprise Census, empirically examines the relationship between e-commerce and employment growth in Japanese firms from 2001 to 2006. The main findings from a multinomial logit model and an extension of a basic firm-growth model are as follows. (1) Regardless of which type of technology is considered, larger firms, foreign firms, and multinational firms conduct more e-commerce. (2) E-commerce has a large positive impact on employment growth. This suggests that new technology, such as e-commerce, complements to employment.

The Location of Multinational Firms’ R&D Activities Abroad: Host Country University Research, University–Industry Collaboration, and R&D Heterogeneity

Abstract We examine the determinants of multinational firms’ propensity to conduct R&D activities in host countries, with specific attention to the influence of host countries’ university research. We consider heterogeneous locational drivers related to the type of R&D activity: basic research, applied research, development for local markets, and development for global markets. Drawing on official survey data on R&D activities by 498 Japanese multinational firms in 24 host countries and estimating two-stage models, we find that the likelihood that firms conduct R&D in a host country is generally increasing in the strength of university research. Conditional on a firm’s R&D presence, university research strength is associated with a greater propensity to conduct (basic) research activities rather than (local) development, while the intensity of host country university–industry collaboration is most strongly associated with applied research. Host country experience and the depth of the firm’s manufacturing presence are also associated higher propensities to engage in research.

The Economic Impact of Korean Reunification on Major Trade Partners: An Empirical Analysis Based on the World Input–Output Tables

ABSTRACT Using the 2011 Word Input–Output Database (WIOD), we examine the economic impact of Korean reunification on Japan, China, the United States, and Russia by industry. We conduct a standard Leontief-type analysis with the assumption of supply constraints in the unified Korea. The results of our analysis show that Korea’s major trade partners would experience a substantial increase in GDP and employment through Korea reunification. In particular, we found that China would benefit the most from Korea reunification.