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Product lifecycle and choice of transportation modes: Japan' s evidence of import and export

Author

Listed:
  • Hideki Murakami

    (Graduate School of Business Administration, Kobe University)

  • Yukari Matsuse

    (Graduate School of Business Administration, Kobe University)

  • Koji Mukaigawa

    (Graduate School of Business Administration, Kobe University)

  • Yushi Tsunoda

    (Graduate School of Business Administration, Kobe University)

Abstract

Here we test the hypothesis that commodities at their peak valuation are transported by air and those at their birth and maturity are shipped by sea, and that shippers would choose air for transporting high-valued commodities. We empirically investigated how the product lifecycle of commodities is reflected by shippers' choices of air transportation rather than seaborne transportation. We also assumed that the commodities that achieved substantial innovation in their lifecycles would be moved by air transportation so that these commodities could reach the targeted markets as quickly as possible to avoid the opportunity costs that might be generated by missed business chances. We constructed two unbalanced panel data of 18 commodities (the case of import) and 14 commodities (the case of export) for 24 years from Japan' s custom, demographic, and international statistics. By estimating structural equation systems that consisted of commodity-specific import/export and import/export air ratio functions, we found that the product lifecycle of cargo outgoing from Japan exactly matched the upward and downward move of the air ratio, whereas since incoming commodities are raw materials that have little to do with product lifecycle or matured phase in their lifecycle stage, the peak of commodities' valuations and the use of air transportation were not necessarily synchronized.

Suggested Citation

  • Hideki Murakami & Yukari Matsuse & Koji Mukaigawa & Yushi Tsunoda, 2013. "Product lifecycle and choice of transportation modes: Japan' s evidence of import and export," Discussion Papers 2013-28, Kobe University, Graduate School of Business Administration.
    • Handle: RePEc:kbb:dpaper:2013-28
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    File URL: https://www.b.kobe-u.ac.jp/papers_files/2013_28.pdf
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    References listed on IDEAS

    as
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    2. Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-1294, September.
    3. Vernon, Raymond, 1979. "The Product Cycle Hypothesis in a New International Environment," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 41(4), pages 255-267, November.
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    Keywords

    product lifecycle; modal choice; structural equations;
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