Under unstable global economic conditions and an increasing competition for customers in the emerging markets of lower income countries, Japanese automotive parts manufacturers and assemblers are striving to minimize their procurement costs to remain competitive. Applying stochastic...

We provide a microfoundation for the production function by using the concept of stochastic macro-equilibrium in Yoshikawa ("Stochastic Macro-equilibrium and Microfoundations for Keynesian Economics," RIETI Discussion Paper, 2013). We consider an economy with multiple firms, with each firm...

This paper uses a monopolistic competitive framework with many sectors to study the impact of trade liberalization on local and global emissions. We focus on the interplay of the pollution haven effect and the home market effect and show how a large-market advantage can counterbalance a high...

This paper documents the procedures of constructing China's input-output tables (IOTs) and supply-use tables (SUTs) in time series for the period 1981-2010 under the East Asian Industrial Productivity/China KLEMS Project. We begin with basic data problems in terms of inconsistencies in concept,...

This paper documents the procedures in constructing China's employment and compensation metrics and measuring labor input in the Chinese economy. We begin with discussions of major conceptual, coverage, and classification problems in the official labor statistics and then propose strategies to...

This paper documents the procedures of constructing industry-level net capital stock and measuring capital services in the Chinese economy. This work is based on our understanding of the major problems in the official investment statistics and follows the system of national accounts (SNA)...

This paper considers the optimal degree of discretion in monetary policy when the central bank conducts policy based on its private information about the state of the economy and is unable to commit. Society seeks to maximize social welfare by imposing restrictions on the central bank's actions...

In this paper, we examine the role of industrial clusters and infrastructure in mitigating or magnifying the impact of the 1995 Kobe earthquake on the survival of manufacturing plants and their post-earthquake economic performance. Our methodological approach is to use information on...

Inward foreign direct investment affects industrial productivity in a host country through a wide range of channels as the presence of foreign firms is heterogeneous across industries, regions, and their characteristics such as entry mode and nationality. Because a wide variety of potential...

Using a large dataset of Japanese firms spanning the period from 1995 to 2011, we analyze private firms' going-public decision as well as their post-initial public offering (IPO) behavior and performance. To this end, we adopt the propensity-score matching difference-in-differences (PSM-DID)...