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Learning by Doing, Export Subsidies, and Industry Growth: Japanese Steel in the 1950s and 1960s

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  • Hiroshi Ohashi

    (Faculty of Economics, The University of Tokyo)

Abstract

The paper examines the Japanese steel industry in the 1950s and 1960s to evaluate the role of export subsidy policies. Export subsidies can be instrumental in increasing an industry's cost competitiveness in the presence of learning by doing, a characteristic of production in the steel industry. The proposed approach addresses identification issues found in the literature. Using a dynamic estimation model, this paper identifies a significant learning rate of above 20%. It also finds little intra-industry knowledge spillover, an observation consistent with the nature of the Japanese employment system at that time. Simulations made with the model indicate that the subsidy policy had an insignificant impact on industry growth. The paper provides underlying economic reasons for the simulation results.

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Bibliographic Info

Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-280.

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Length: 43 pages
Date of creation: May 2004
Date of revision:
Handle: RePEc:tky:fseres:2004cf280

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  1. Spence, Michael, 1984. "Cost Reduction, Competition, and Industry Performance," Econometrica, Econometric Society, vol. 52(1), pages 101-21, January.
  2. Feenstra, Robert C., 1986. "Trade policy with several goods and market linkages," Journal of International Economics, Elsevier, vol. 20(3-4), pages 249-267, May.
  3. Beason, Richard & Weinstein, David E, 1996. "Growth, Economies of Scale, and Targeting in Japan (1955-1990)," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 286-95, May.
  4. "Miwa, Yoshiro" & "Ramseyer, J. Mark", 2001. "Japanese Economic Policy and Policy Evaluation―The Case of “Industrial Policy”―," Economic Review, Hitotsubashi University, vol. 52(3), pages 193-204, July.
  5. C. Lanier Benkard, 2000. "Learning and Forgetting: The Dynamics of Aircraft Production," American Economic Review, American Economic Association, vol. 90(4), pages 1034-1054, September.
  6. Harald Gruber, 1998. "Learning by Doing and Spillovers: Further Evidence for the Semiconductor Industry," Review of Industrial Organization, Springer, vol. 13(6), pages 697-711, December.
  7. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
  8. Rebecca Achee Thornton & Peter Thompson, 2001. "Learning from Experience and Learning from Others: An Exploration of Learning and Spillovers in Wartime Shipbuilding," American Economic Review, American Economic Association, vol. 91(5), pages 1350-1368, December.
  9. Irwin, Douglas A & Klenow, Peter J, 1994. "Learning-by-Doing Spillovers in the Semiconductor Industry," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1200-1227, December.
  10. Itoh, Motoshige & Kiyono, Kazuharu, 1987. "Welfare-Enhancing Export Subsidies," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 115-37, February.
  11. Robert E. Baldwin, 2003. "Openness and Growth: What's the Empirical Relationship?," NBER Working Papers 9578, National Bureau of Economic Research, Inc.
  12. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
  13. Head, Keith, 1994. "Infant industry protection in the steel rail industry," Journal of International Economics, Elsevier, vol. 37(3-4), pages 141-165, November.
  14. Douglas A. Irwin & Nina Pavcnik, 2001. "Airbus versus Boeing Revisited: International Competition in the Aircraft Market," NBER Working Papers 8648, National Bureau of Economic Research, Inc.
  15. Miravete, Eugenio J., 1998. "Infant-industry tariff protection with pressure groups," International Journal of Industrial Organization, Elsevier, vol. 16(6), pages 749-784, November.
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Blog mentions

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  1. Kündigungsschutz – ein Innovationsmotor?
    by Kantoos in Kantoos Economics on 2010-12-21 12:00:00
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Cited by:
  1. Samba Mbaye, 2013. "Currency undervaluation and growth: Is there a productivity channel?," Economie Internationale, CEPII research center, issue 133, pages 8-28.
  2. Tsuyoshi Nakamura & Hiroshi Ohashi, 2011. "Matrix Exponential Stochastic Volatility with Cross Leverage," CIRJE F-Series CIRJE-F-813, CIRJE, Faculty of Economics, University of Tokyo.
  3. Park, Sangin, 2009. "An empirical evaluation of the 1986 Semiconductor Trade Arrangement," Japan and the World Economy, Elsevier, vol. 21(4), pages 349-357, December.
  4. Hiroshi Ohashi & Tsuyoshi Nakamura, 2005. "Technology Adoption, Learning by Doing, and Productivity: A Study from Steel Refining Furnaces," 2005 Meeting Papers 28, Society for Economic Dynamics.
  5. Ju, Jiandong & Lin, Justin Yifu & Wang, Yong, 2011. "Marshallian externality, industrial upgrading, and industrial policies," Policy Research Working Paper Series 5796, The World Bank.

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