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Is the Japanese Distribution System Really Inefficient?

In: Trade with Japan: Has the Door Opened Wider?

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  • Takatoshi Ito
  • Masayoshi Maruyama

Abstract

This paper investigates the efficiency of the Japanese distribution system, measured by the distribution margin. Most of the discussions on the Japanese distribution system have so far relied on institutional descriptions and anecdotal evidence, failing to substantiate the case. The present paper will show that the Japanese and U.S. distribution sectors are about the same in terms of value added and distribution margins. Therefore, it is not true that the distribution sector adds up unnecessary distribution costs or earns monopolistic operating profits. This paper will not address a question whether the distribution system is acting as a non-tariff barrier. Thus, even if the distribution sector in Japan is judged to be "efficient," it leaves open a possibility that the distribution system works as a barrier to potential new entrants from both home and foreign manufacturers.
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Suggested Citation

  • Takatoshi Ito & Masayoshi Maruyama, 1991. "Is the Japanese Distribution System Really Inefficient?," NBER Chapters, in: Trade with Japan: Has the Door Opened Wider?, pages 149-174, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:8663
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    References listed on IDEAS

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    1. Flath, David, 1990. "Why are there so many retail stores in Japan?," Japan and the World Economy, Elsevier, vol. 2(4), pages 365-386, December.
    2. Flath, David, 1989. "Vertical restraints in Japan," Japan and the World Economy, Elsevier, vol. 1(2), pages 187-203, March.
    3. Flath, David & Nariu, Tatsuhiko, 1989. "Returns policy in the Japanese marketing system," Journal of the Japanese and International Economies, Elsevier, vol. 3(1), pages 49-63, March.
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    Citations

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    Cited by:

    1. Kenn Ariga & Kenji Matsui, 2003. "Mismeasurement of the CPI," NBER Chapters, in: Structural Impediments to Growth in Japan, pages 89-154, National Bureau of Economic Research, Inc.
    2. Research and Statistics Department, 2018. "Compilation Method of the gWholesale Services Price Index hin Japan @ @ @ @," Bank of Japan Research Papers 18-06-29, Bank of Japan.
    3. Motoshige Itoh, 2000. "Competition in the Japanese Distribution Market and Market Access from Abroad," NBER Chapters, in: Deregulation and Interdependence in the Asia-Pacific Region, pages 139-156, National Bureau of Economic Research, Inc.
    4. Youngmin BAEK & HAYAKAWA Kazunobu & TSUBOTA Kenmei & URATA Shujiro & YAMANOUCHI Kenta, 2019. "Tariff Pass-through in Wholesaling: Evidence from Firm-level Data in Japan," Discussion papers 19064, Research Institute of Economy, Trade and Industry (RIETI).
    5. Hideki Yamawaki, 2004. "Who Survives in Japan? An Empirical Analysis of European and U.S. Multinational Firms in Japanese Manufacturing Industries," Journal of Industry, Competition and Trade, Springer, vol. 4(2), pages 135-153, June.
    6. Michael E. Porter & Mariko Sakakibara, 2004. "Competition in Japan," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 27-50, Winter.
    7. Knetter, Michael M., 1997. "Why are retail prices in Japan so high? Evidence from German export prices," International Journal of Industrial Organization, Elsevier, vol. 15(5), pages 549-572, August.
    8. Jong Il Kim & June Dong Kim, 2000. "Liberalization of Trade in Services and Productivity Growth in Korea," Trade Working Papers 21762, East Asian Bureau of Economic Research.
    9. Gary R. Saxonhouse, 1993. "What Does Japanese Trade Structure Tell Us about Japanese Trade Policy?," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 21-43, Summer.
    10. Hyberg, Bengt & Uri, Noel D. & Oliveira, Valencia, 1996. "The quality characteristics of Japanese soybean imports," Japan and the World Economy, Elsevier, vol. 8(1), pages 81-98, March.
    11. Terutomo Ozawa, 2001. "The "Hidden" Side of the "Flying-Geese" Model of Catch-Up Growth: Japan's Dirigiste Institutional Setup and a Deepening Financial Morass," Economics Study Area Working Papers 20, East-West Center, Economics Study Area.
    12. Takatoshi Ito, 1993. "U.S. Political Pressure and Economic Liberalization in East Asia," NBER Chapters, in: Regionalism and Rivalry: Japan and the United States in Pacific Asia, pages 391-422, National Bureau of Economic Research, Inc.
    13. Marcus Noland, 1993. "Protectionism in Japan," Open Economies Review, Springer, vol. 4(1), pages 67-81, March.
    14. David E. Weinstein, 1997. "Foreign Direct Investment and Keiretsu: Rethinking U.S. and Japanese Policy," NBER Chapters, in: The Effects of US Trade Protection and Promotion Policies, pages 81-116, National Bureau of Economic Research, Inc.
    15. ANDREW R. Dick, 1993. "Japanese Antitrust: Reconciling Theory And Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 11(2), pages 50-61, April.
    16. René Hertog & Jeroen Potjes & A. Thurik, 1994. "Retail profit margins in Japan and Germany," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(2), pages 375-390, June.
    17. Ozawa, Terutomo, 2001. "The "hidden" side of the "flying-geese" catch-up model: Japan's dirigiste institutional setup and a deepening financial morass," Journal of Asian Economics, Elsevier, vol. 12(4), pages 471-491.
    18. Peter Hooper & Elizabeth Vranlovich, 1995. "International comparisons of the levels of unit labor costs in manufacturing," International Finance Discussion Papers 527, Board of Governors of the Federal Reserve System (U.S.).
    19. Noland, Marcus, 1995. "Why are prices in Japan so high?," Japan and the World Economy, Elsevier, vol. 7(3), pages 255-261, September.
    20. David Flath, 2003. "Regulation, Distribution Efficiency, and Retail Density," NBER Working Papers 9450, National Bureau of Economic Research, Inc.

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