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Foreign technology acquisition policy and firm performance in Japan, 1957-1970: Micro-aspects of industrial policy

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  • Kiyota, Kozo
  • Okazaki, Tetsuji

Abstract

We examine the determinants and effects of technology acquisition licensing, using firm-level data between 1957 and 1970. Our results indicate that in technology acquisition licensing, the government screened a firm's application based on (i) the industry that the firm belonged to and (ii) its past experience of technology acquisition. As a result, inefficient firms with considerable experience tended to acquire more technologies before deregulation. Despite this screening process, the technology acquisition policy contributes to improve a firm performance: The firms with acquired technology succeeded in capital accumulation, which results in much faster growth of labor productivity.
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  • Kiyota, Kozo & Okazaki, Tetsuji, 2005. "Foreign technology acquisition policy and firm performance in Japan, 1957-1970: Micro-aspects of industrial policy," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 563-586, September.
  • Handle: RePEc:eee:indorg:v:23:y:2005:i:7-8:p:563-586
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    1. Kiyohiko G. Nishimura & Takanobu Nakajima & Kozo Kiyota, 2003. "Does Natural Selection Mechanism Still Work in Severe Recessions? -- ]Examination of the Japanese Economy in the 1990s ---," CIRJE F-Series CIRJE-F-222, CIRJE, Faculty of Economics, University of Tokyo.
    2. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    3. Okazaki, Tetsuji & Korenaga, Takafumi, 1999. "Foreign exchange allocation and productivity growth in post-war Japan: a case of the wool industry," Japan and the World Economy, Elsevier, vol. 11(2), pages 267-285, April.
    4. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    5. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
    6. Noland, Marcus, 1993. "The Impact of Industrial Policy on Japan's Trade Specialization," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 241-248, May.
    7. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-564, September.
    8. Branstetter, Lee & Sakakibara, Mariko, 1998. "Japanese Research Consortia: A Microeconometric Analysis of Industrial Policy," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 207-233, June.
    9. Weinstein David E., 1995. "Evaluating Administrative Guidance and Cartels in Japan (1957-1988)," Journal of the Japanese and International Economies, Elsevier, vol. 9(2), pages 200-223, June.
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    Cited by:

    1. Doan Thi Thanh Ha & Kozo Kiyota, 2014. "Firm-Level Evidence on Productivity Differentials and Turnover in Vietnamese Manufacturing," The Japanese Economic Review, Japanese Economic Association, vol. 65(2), pages 193-217, June.
    2. Kiyota, Kozo & Okazaki, Tetsuji, 2016. "Assessing the effects of Japanese industrial policy change during the 1960s," Journal of the Japanese and International Economies, Elsevier, vol. 40(C), pages 31-42.
    3. López, Ricardo A., 2008. "Foreign Technology Licensing, Productivity, and Spillovers," World Development, Elsevier, vol. 36(4), pages 560-574, April.
    4. Roberto Alvarez & Ricardo A. López, 2015. "Foreign Technology Acquisition and Changes in the Real Exchange Rate," The World Economy, Wiley Blackwell, vol. 38(4), pages 613-628, April.
    5. Kozo Kiyota & Miho Takizawa, 2006. "The Shadow of Death: Pre-exit Performance of Firms in Japan," Discussion papers 06033, Research Institute of Economy, Trade and Industry (RIETI).
    6. KIYOTA Kozo & OKAZAKI Tetsuji, 2013. "Effects of Industrial Policy on Productivity: The case of import quota removal during postwar Japan," Discussion papers 13093, Research Institute of Economy, Trade and Industry (RIETI).
    7. Ricardo Lopez, 2008. "Foreign technology acquisition, spillovers, and sunk costs: evidence from plant-level data," Economics Bulletin, AccessEcon, vol. 15(11), pages 1-7.
    8. Hasegawa, Makoto & Kiyota, Kozo, 2017. "The effect of moving to a territorial tax system on profit repatriation: Evidence from Japan," Journal of Public Economics, Elsevier, vol. 153(C), pages 92-110.
    9. Kozo Kiyota & Tetsuji Okazaki, 2010. "Industrial Policy Cuts Two Ways: Evidence from Cotton-Spinning Firms in Japan, 1956-1964," Journal of Law and Economics, University of Chicago Press, vol. 53(3), pages 587-609.
    10. Shuhei Aoki & Julen Esteban-Pretel & Tetsuji Okazaki & Yasuyuki Sawada, 2009. "The Role of the Government in Facilitating TFP Growth during Japan's Rapid Growth Era," CIRJE F-Series CIRJE-F-622, CIRJE, Faculty of Economics, University of Tokyo.
    11. Sébastien Lechevalier, 2007. "The diversity of Capitalism and Heterogeneity of Firms – A Case Study of Japan during the Lost Decade," Post-Print halshs-00402911, HAL.
    12. Chung, Moon Young & Lee, Keun, 2015. "How Absorptive Capacity is Formed in a Latecomer Economy: Different Roles of Foreign Patent and Know-how Licensing in Korea," World Development, Elsevier, vol. 66(C), pages 678-694.
    13. repec:ebl:ecbull:v:15:y:2008:i:11:p:1-7 is not listed on IDEAS

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