Tangjun Yuan

An international comparison of the TFP levels and the productivity convergence of Japanese, Korean, Taiwanese and Chinese listed firms

Focusing on Japanese, Korean, Taiwanese, and Chinese firms in the manufacturing sector, this paper examines productivity catch-up at the firm level using the distance from the technology frontier as a direct measure of the potential for catch-up. We also examine the role of absorptive capacity for technological catch-up by including variables such as R&D expenditure and foreign ownership in our empirical estimation. We find that the national frontier has a stronger pull on domestic firms than the regional frontier, which is in line with findings by Bartelsman, Haskel, and Martin (2008). This result indicates that policies to raise the technology level of national frontier firms are beneficial for all firms in that country.

Real GDP in Pre-War East Asia: A 1934-36 Benchmark Purchasing Power Parity Comparison with the U.S

This article provides estimates of purchasing power parity (PPP) converters for expenditure side GDP of Japan/China and Japan/U.S through a detailed matching of prices for more than 50 types of goods and services in private consumption and about 20 items or sectors for investment and government expenditure. Based on our finding and linking with the earlier studies on the relative price levels of Taiwan and Korea, we derive the mid-1930s benchmark PPP adjusted per capita income of Japan, China, Taiwan and Korea at 31%, 10%, 23%, and 12% of the U.S. level respectively for the mid-1930s. These estimates corrected the consistent downward bias in East Asian income levels based on market exchange rate conversions. While confirming Angus Maddisons estimates for China and Taiwan based on the 1990 benchmark back-projection method, they do point to a 23% and 85% overestimate in his comparable figures for Japan and Korea respectively for the mid-1930s period. This article develops a preliminary theoretical and empirical framework to demonstrate the possible source of the biases in the back-projection method. We briefly discuss the implications of our findings on the initial conditions and long-term growth dynamics in East Asia and beyond.

A Comparative Analysis of Productivity Growth and Productivity Dispersion: Microeconomic Evidence Based on Listed Firms from Japan, Korea, and China

Utilizing the firm-level dataset, this study aims to explore differences in firm-level productivity and growth between Japan, Korea, and China, while at the same time illuminating the mechanism that has driven the narrowing in the productivity gap that can be observed. We pursue two strategies. First, we compare the firm-level TFP distribution of major industries in these three countries over time to examine catch-up patterns within and across industries. Second, in order to examine patterns of technology diffusion across these three countries, we conduct a regression analysis on TFP convergence to the national frontier and to the global frontier. Our main results can be summarized as follows. First, although Japanese firms enjoy the highest average TFP level in many industries, their TFP growth rate has been relatively low during the past two decades. Korean firms have achieved considerable TFP growth in certain industries. The average TFP level of Chinese firms is still much lower than that of Japanese and Korean firms in many industries. Second, within-industry dispersion of TFP levels is very small for Japanese firms. While the within-industry ranking of TFP levels hardly changes in the case of Japan, fluctuations in the ranking are relatively frequent in the case of Korea. Third, in Korea, the TFP levels of low-performing firms are approaching those of the national frontier firms at a more rapid pace than in Japan.

China's Growth Slowdown: Lessons from Japan's Experience and the Expected Impact on Japan, the USA and Germany

China is switching from economic growth based on extremely rapid capital accumulation to economic growth based on structural reforms and accelerated total factor productivity growth. Meanwhile, China will also face a serious excess saving problem as capital accumulation slows and, hence, needs to reduce its private saving rate. Based on this analysis, we estimated the economic impact of Chinas growth slowdown and hypothetical economic transformation on Japan, the USA and Germany using the world input–output database. We compared the following three scenarios for Chinas final demand in 2020 and economic growth from 2015 to 2020: (i) an optimistic scenario (GDP growth rate = 6.2%, investment/GDP = 0.501); (ii) a slowdown scenario (GDP growth rate = 4%, investment/GDP = 0.501); and (iii) a structural reform scenario (GDP growth rate = 6.2%, investment/GDP = 0.3). Our analysis suggests that Japan and Germany would suffer more from structural reforms in China than from a slowdown in growth. Meanwhile, for the USA, the employment decline triggered by structural reforms would be much smaller than the employment decline caused by a slowdown in growth.