Motoshige Itoh

Tariffs, Quotas, and Market Structure

This paper examines the effects of tariffs and quotas on the pricing pattern of producers in the case of duopoly by a domestic monopolist and a foreign monopolist. It is pointed out that tariffs and quotas may induce completely different pricing patterns in the two producers. Under a quota, it is always profitable for the home producer to be a price leader and for the foreign producer to be a follower, whereas under a tariff either producer may become a leader. It is also proved that, whatever leader-follower relation is chosen under a tariff, a quota always bring about a higher domestic price than the tariff as long as both permit the same amount of imports.

Welfare-enhancing Export Subsidies

This paper shows that export subsidies on marginal goods and those on nonmarginal goods have opposite welfare effects for the country imposing these subsidies, where marginal goods are the ones that would be exported by only a small amount or not at all under free trade but whose export can be promoted considerably by export subsidies. The former enhances the imposing countrys welfare, while the latter worsens it. The paper also throws light on related issues such as industrial targeting policy.

Fulfilling the export potential of small and medium firms

List of Contributors. 1. Supporting the Export Activities of Small and Medium Enterprise (SME) B. Levy, et al. 2. Technical, Marketing and Financial Support for Indonesias Small and Medium Industrial Exporters A. Berry, B. Levy. 3. The Support System for Small and Medium Exporters in Japan M. Itoh, S. Urata. 4. Korean SMEs and Their Support Mechanisms Linsu Kim, J.B. Nugent. 5. Colombias Small and Medium Exporters and Their Support System A. Berry, J.F. Escandon. 6. Comparative Analysis of SME Support Systems B. Levy, et al. 7. Implications for Theory, Policy and Future Research J.B. Nugent, et al. References. Index.

Monopoly, product differentiation and economic welfare

Abstract This paper discusses the pricing behavior of a monopolistic producer supplying several quality-differentiated goods by using a model of a Lancasterian characteristic approach with consumers taste pattern dispersed. It examines how finer product differentiation, which is made by the producer by means of the introduction of a new good, changes the price structure and consumers welfare. It will be establised that the entry of a new good imposes quite different impacts on the price of the goods of higher quality and on those of lower-quality goods.

Tariffs vs. quotas under duopoly of heterogeneous goods

Abstract This paper analyzes a model of duopoly with heterogeneous goods where behavior patterns are endogenously determined by producers. It is shown that the source of non-equivalence of tariffs and quotas is not the monopolistic behavior of the domestic producer over consumers, but a certain kind of his behavior against the foreign producers. This result is then extended to the cases of a general Nash-type oligopoly and monopolistic competition. The paper also examines how the behavior patterns of the producers are affected by tariffs and quotas and proves non-equivalence of tariffs and quotas in the duopoly situation where the pricing behavior of the producers is endogenously determined by trade policies.

Small and Medium-Size Enterprise Support Policies in Japan

The authors examine how Japans public and private sectors support small and medium-size enterprises (SMEs). They focus on technical, financial, and marketing assistance. Their findings are based on a survey of 107 firms; 40 that produce silverware, 33 engaged in synthetic textile weaving, and 34 that manufacture auto parts. Each sector represents a distinctive form of industrial organization, but they also share several characteristics: each industry is concentrated in a particular region, each involves close subcontracting relationships, and each has overcome difficulties and achieved a certain measure of industrial success. Technical support for these SMEs came largely through private channels, including parent firms, equipment suppliers, and other firms in the same line of business. Public institutions played only a subordinate role. Marketing support also came largely from parent firms, trading companies, and other private sources. Producers of intermediate goods in particular - such as auto parts and synthetic textiles - relied heavily on subcontractors. Most loans for Japans SMEs were provided under competitive market conditions but three sources of directed credit - loans from specialized parastatals, loans channeled through local governments, and loan guarantees - accounted for about 20 percent of all SME borrowing and 35 to 60 percent of investment borrowing. Default rates averaged less than one-half of one percent of outstanding loans, and real interest rates were positive. The majority of firms surveryed used and valued directed credits. The smallest firms in particular valued them. Public institutions complemented the private marketplace in all three areas. Public technical and marketing support helped create and maintain private networks. In finance, Japan successfully embedded directed credit in a well-functioning, predominantly private, competitive, and prudential financial system. Through partnerships, public support continues to play both a direct and an indirect role in supporting the development of SMEs in Japan.

Trade imbalance, trade frictions and maintaining a liberal trade regime in the Asia‐Pacific: Recent trends in Japanese trade policies

Abstract This paper reviews the recent trend of Japans trade policies. The issue of current account and trade account surplus, which has been at the center of trade conflicts Japan faced since the 1980s, will recede gradually, reflecting the aging of the Japanese population and an accompanying fall in saving rate. The Japanese government is now changing its trade negotiation stance from discretionary bilateral negotiation to rule‐based actions. This change is reflected in more active use of the WTO panel rule and the changing stance of the government to anti‐dumping issues. One can also observe a drastic change in the negotiation style in such areas as semiconductors and automobiles. In the area of services, however, bilateral negotiation still plays an important role. In service sectors increasing international competition forces the Japanese government to deregulate the domestic market unilaterally, and this liberalization is changing the competitive conditions in the Japanese market. This basic trend ...

Upgrading Technological Capabilities of Small and Medium Size Enterprises: Public and Private Support in the Japanese and Korean Auto Parts Industries

Small and medium size enterprises (SMEs) have been the target of renewed interest in discussions on economic growth in recent years. In the 1960s and 1970s economists thought of SMEs as a backward sector employing unskilled labour. These views and attitudes toward SMEs changed in the 1980s. Economists, realizing the important role of SMEs as suppliers of parts and components to final assemblers and recognizing the creativity and flexibility of SMEs, began to look at SMEs as a sector that plays an important and constructive role in promoting economic growth. Indeed, upgrading the technological capabilities of SMEs is considered crucial for the development of competitive industries and economy.

Foreign Direct Investment, International Trade and Transfer of Technology: A Case Study in South-East Asia

The miraculous economic growth of the South-East Asian economies in the last decade cannot be considered in isolation from the active foreign direct investment (FDI) into this region, and the resulting changes in the pattern of trade. The South-East Asian countries started growing rapidly after they changed their policy stance from protectionist import substitution policies to more liberal attitudes to capital inflow and a policy orientated towards exports. The changes in their trade positions have coincided with very active foreign direct investment from some countries such as Japan.

The Support System for Small and Medium Exporters in Japan

This chapter has two main objectives. The first is to review the role of SMEs in Japan’s economic development, their evolution over time, and the ways in which they acquired technological capability, marketing capability, and financial resources. The second is to examine and evaluate the public sector’s role in assisting SMEs in acquiring these technological and marketing capabilities and financial resources.