Takanobu Nakajima

An Index Number Method for Estimating Scale Economies and Technical Processes Using Time-series of Cross-section Data: Sources of Total Factor Productivity Growth for Japanese Manufacturing, 1964–1988

Sample multicollinearity often makes it difficult to estimate returns to scale. We present an index number method to overcome potential multicollinearity problems when the production function is homogeneous of degree k. We apply our method to estimate empirically the effects of returns to scale and technical progress on growth in total factor productivity (TFP) using establishment data for Japanese manufacturing industries. We find that, while significant scale economies exist in many manufacturing industries, the TFP growth in the last twenty-five years is attributable primarily to technical progress. This finding also validates the current practice of assuming constant-returns-to-scale production functions in macroeconometric modelling. JEL Classification Numbers: C43, D24, 030.

Productivity Convergence at the Firm Level

Productivity convergence among countries has been investigated extensively with mixed results. This paper extends the analysis to the firm level to shed light on the debate of convergence or non-convergence. We find productivity convergence among firms widely in Japan, in both manufacturing industries and non-manufacturing ones. We obtain these results taking explicit account of exiting firms as a source of selection biases. The convergence rate is much faster among firms than countries. We also find that there are substantial differences among industries in the convergence speed. IT industries that heavily rely on technological progress show faster rates of convergence.

Issues on Japan's Intellectual Product

Evidence suggests that Japans basic research levels seem to lag behind that of the USA. This paper seeks to investigate (1) the reasons for this difference in the context of societal impact on the creation of intellectual products, (2) the influence of the different legal systems as they relate to the treatment of intellectual products, and (3) the aspect of market size as an essential factor in the creation of intellectual products protected by copyright. This last category includes intellectual products such as visual products, publications, music, and computer software.

Environmental equipment cost analysis: optimum size of a biocoal briquette machine

For developing countries that consume coal as their primary energy source, the method of desulfurization is a major issue. We installed experimental biocoal briquette production machines as a simple, inexpensive technology for desulfurization in China. Biocoal briquettes are a high-pressured mixture of powdered coal and biomass, with powdered lime added as a desulfurizer. In order to spread the use of these machines, it is important to consider the market size and with that knowledge determine the size of biocoal briquette machines. The objective of this study was to quantitatively evaluate the optimum size of biocoal briquette machines. There are two principal effects of economies of scale that need to be considered when evaluating briquette machine size with respect to market size. One effect is that the average marginal briquette cost decreases as the machine size increases. The other consideration is the mass production effect of manufacturing a large number of machines. As a result, below a given market size we should manufacture more machines that have a capacity less than 15t/h, which is the optimum machine size for briquette cost.

The Productivity Analysis of Postal Services

In Japan, the Postal Services Agency1 has provided monopolistic postal services for more than one hundred years based on Article 1 of the Postal Law, which stipulates, “the objective of postal service is to enhance public welfare by fairly providing postal services at the lowest possible rate on a nationwide basis.” Institute for Posts and Telecommunications Policy (IPTP) and Ministry of Posts and Telecommunications (MPT) (2000) clarified the purpose of Japan’s postal universal services specifically as “to deliver letter-postcard items and parcels accepted through post boxes or post offices throughout the country, with the lowest possible rate and on a nationwide basis to each doorstep.”2 However, in 2003, Japan’s postal operation is scheduled to shift from the Postal Services Agency to a new state-run corporation with a more flexible management structure, and the letter-postcard delivery will be fully opened to private companies. Postal administrations in many industrialized countries will also be facing diminishing reserved areas and increasing competition with new entrants to newly liberalized postal markets. For postal services to fulfill their universal service obligation (USO), the postal administrations around the world are expected to focus on increasing operational efficiency and productivity to preserve a fair and affordable postal rate.

Japan’s Economic Growth: Past and Present

Since the burst of the economic bubble in 1990, Japanese economic growth has been minimal, with an average GDP growth rate of less than 1 per cent in the 1990s. Japan’s recent economic performance contrasts with that achieved in earlier years: in the 1960s the GDP growth rate was around 10 per cent, but it declined to 4 per cent in the 1970s and 1980s, and to 1 per cent in the 1990s. (Figure 2.1).