IDEAS home Printed from https://ideas.repec.org/p/esj/esridp/067.html
   My bibliography  Save this paper

Sectoral Productivity and Economic Growth in Japan 1970-98: An Empirical Analysis Based on the JIP Database

Author

Listed:
  • FUKAO Kyoji
  • INUI Tomohiko
  • KAWAI Hiroki
  • MIYAGAWA Tsutomu

Abstract

In this paper we conducted a detailed analysis of Japan's TFP growth by making use of the Japan Industrial Productivity Database (the JIP Database) which we have recently completed. We got the following results. 1.After taking account of the quality of labor and the capacity utilization rate we found the decline in TFP growth at the macro-level from the 1980s to the 1990s not to be so great. Hayashi and Prescott (2002) seem to have overestimated the size of the TFP growth decline. 2.On the other hand, there was a substantial change in the pattern of sectoral TFP growth. The slowdown in TFP growth mainly occurred in the manufacturing sector. In contrast, TFP growth in the non-manufacturing sectors accelerated during the 1990s. 3.In the 1990s, substantial deregulations were accomplished in non-manufacturing industries, especially in communication, wholesale and retail trade, and finance, insurance and real estate, and this change seems to have contributed to the acceleration of TFP growth in these industries. But we should also note that, compared with other developed countries, Japan's TFP growth in the non-manufacturing sector is still quite low. 4.Regarding the manufacturing sector in the 1990s, the following three factors seem to have contributed to the low level of TFP growth. First, new entries were very limited. Secondly, the exit effect was negative, that is, the average TFP level of exiting firms was higher than that of staying firms. Thirdly, the reallocation effect of resources was small.

Suggested Citation

  • FUKAO Kyoji & INUI Tomohiko & KAWAI Hiroki & MIYAGAWA Tsutomu, 2003. "Sectoral Productivity and Economic Growth in Japan 1970-98: An Empirical Analysis Based on the JIP Database," ESRI Discussion paper series 067, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esj:esridp:067
    as

    Download full text from publisher

    File URL: http://www.esri.go.jp/jp/archive/e_dis/e_dis067/e_dis067a.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kyoji Fukao & Tsutomu Miyagawa & Hiroki Kawai & Tomohiko Inui & Ximing Yue & Yoshinobu Okumoto & Masakatu Nakamura & Masahide Hayashida & Kazuyoshi Nakata & Kensho Hashikawa & Naoki Okumura & Yukako M, 2003. "Sectoral Productivity and Economic Gwowth in Japan : 1970-98 (in Japanese)," Economic Analysis, Economic and Social Research Institute (ESRI), vol. 170, pages 3-415, June.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    3. Ito, Keiko & Fukao, Kyoji, 2005. "Foreign direct investment and trade in Japan: An empirical analysis based on the Establishment and Enterprise Census for 1996," Journal of the Japanese and International Economies, Elsevier, vol. 19(3), pages 414-455, September.
    4. Fumio Hayashi & Edward C. Prescott, 2004. "The 1990s in Japan: a lost decade," Chapters, in: Paolo Onofri (ed.), The Economics of an Ageing Population, chapter 2, Edward Elgar Publishing.
    5. Craig Burnside & Martin Eichenbaum & Sergio Rebelo, 1995. "Capital Utilization and Returns to Scale," NBER Chapters, in: NBER Macroeconomics Annual 1995, Volume 10, pages 67-124, National Bureau of Economic Research, Inc.
    6. Dale W. Jorgenson & Kazuyuki Motohashi, 2003. "Economic Growth of Japan and the United States in the Information Age," Discussion papers 03015, Research Institute of Economy, Trade and Industry (RIETI).
    7. Hahn, Chin-hee, 2000. "Entry, Exit, and Aggregate Productivity Growth: Micro Evidence on Korean Manufacturing," KDI Policy Studies 2000-04, Korea Development Institute (KDI).
    8. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters, in: New Developments in Productivity Analysis, pages 303-372, National Bureau of Economic Research, Inc.
    9. Paprzycki,Ralph & Fukao,Kyoji, 2012. "Foreign Direct Investment in Japan," Cambridge Books, Cambridge University Press, number 9781107411289, October.
    10. Aw, Bee Yan & Chen, Xiaomin & Roberts, Mark J., 2001. "Firm-level evidence on productivity differentials and turnover in Taiwanese manufacturing," Journal of Development Economics, Elsevier, vol. 66(1), pages 51-86, October.
    11. Charles R. Hulten, 1978. "Growth Accounting with Intermediate Inputs," Review of Economic Studies, Oxford University Press, vol. 45(3), pages 511-518.
    12. Susanto Basu, 1996. "Procyclical Productivity: Increasing Returns or Cyclical Utilization?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(3), pages 719-751.
    13. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    14. Kiyohiko G. Nishimura & Kazunori Minetaki & Masato Shirai & Futoshi Kurokawa, 2002. "Effects of Information Technology and Aging Work Force on Labor Demand and Technological Progress in Japanese Industries: 1980-1998," CIRJE F-Series CIRJE-F-145, CIRJE, Faculty of Economics, University of Tokyo.
    15. Kyoji Fukao & Kiyohiko Nishimura & Qing-Yuan Sui & Masayo Tomiyama, 2005. "Japanese Banks’ monitoring activities and the performance of borrower firms: 1981–1996," International Economics and Economic Policy, Springer, vol. 2(4), pages 337-362, December.
    16. Martin Neil Baily, 1986. "Productivity Growth and Materials Use in U. S. Manufacturing," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 185-195.
    17. Chin Hee Hahn, 2000. "Entry, Exit, and Aggregate Productivity Growth: Micro Evidence on Korean Manufacturing," OECD Economics Department Working Papers 272, OECD Publishing.
    18. Griliches, Zvi & Regev, Haim, 1995. "Firm productivity in Israeli industry 1979-1988," Journal of Econometrics, Elsevier, vol. 65(1), pages 175-203, January.
    19. Alessandra Colecchia & Paul Schreyer, 2002. "ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case? A Comparative Study of Nine OECD Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 408-442, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Keiko Ito & Kyoji Fukao, 2005. "Physical and Human Capital Deepening and New Trade Patterns in Japan," NBER Chapters, in: International Trade in East Asia, pages 7-52, National Bureau of Economic Research, Inc.
    2. Jorgenson, Dale W. & Nomura, Koji, 2005. "The industry origins of Japanese economic growth," Journal of the Japanese and International Economies, Elsevier, vol. 19(4), pages 482-542, December.
    3. Kyoji Fukao & Toshihiro Okubo, 2004. "Why Has the Border Effect in the Japanese Market Declined?: The Role of Business Networks in East Asia," Hi-Stat Discussion Paper Series d03-24, Institute of Economic Research, Hitotsubashi University.
    4. Yosuke Okada, 2005. "Competition and Productivity in Japanese Manufacturing Industries," NBER Working Papers 11540, National Bureau of Economic Research, Inc.
    5. Yoshihiko Hogen & Ko Miura & Koji Takahashi, 2017. "Large Firm Dynamics and Secular Stagnation: Evidence from Japan and the U.S," Bank of Japan Working Paper Series 17-E-8, Bank of Japan.
    6. Fukao, Kyoji & Ito, Keiko & Kwon, Hyeog Ug, 2005. "Do out-in M&As bring higher TFP to Japan? An empirical analysis based on micro-data on Japanese manufacturing firms," Journal of the Japanese and International Economies, Elsevier, vol. 19(2), pages 272-301, June.
    7. Ito, Keiko & 伊藤, 恵子 & イトウ, ケイコ & Fukao, Kyoji & 深尾, 京司 & フカオ, キョウジ, 2003. "Vertical Intra-Industry Trade and the Division of Labor in East Asia," Discussion Paper Series a444, Institute of Economic Research, Hitotsubashi University.
    8. Kyoji Fukao, 2013. "Explaining Japan's Unproductive Two Decades," Asian Economic Policy Review, Japan Center for Economic Research, vol. 8(2), pages 193-213, December.
    9. Hitoshi Sasaki & Kenichi Sakura, 2005. "Changes in the Demand for Skilled Labor within Japan's Manufacturing Sector:Effects of Skill-Biased Technological Change and Globalization," Bank of Japan Working Paper Series 05-E-12, Bank of Japan.
    10. Yanfei Li & Wai-Mun Chia, 2013. "Information and communication technology and economic growth of four Asian industrialized economies," Chapters, in: Sören Eriksson (ed.), Clusters and Economic Growth in Asia, chapter 2, pages 21-39, Edward Elgar Publishing.
    11. Preciado Arreola, José Luis & Johnson, Andrew L. & Chen, Xun C. & Morita, Hiroshi, 2020. "Estimating stochastic production frontiers: A one-stage multivariate semiparametric Bayesian concave regression method," European Journal of Operational Research, Elsevier, vol. 287(2), pages 699-711.
    12. Betts, Caroline, 2021. "Accounting for Japan's Lost Score," MPRA Paper 109285, University Library of Munich, Germany.
    13. Betts, Caroline, 2021. "How many (more) lost decades? The great productivity slowdown in Japan," MPRA Paper 106503, University Library of Munich, Germany.
    14. Naomi N. Griffin, 2005. "Labor Adjustment, Productivity and Output Volatility: An Evaluation of Japan's Employment Adjustment Subsidy: Working Paper 2005-10," Working Papers 17567, Congressional Budget Office.
    15. Naomi N. Griffin & Kazuhiko Odaki, 2006. "Reallocation and Productivity Growth in Japan: Revisiting the Lost Decade of the 1990s: Working Paper 2006-02," Working Papers 17603, Congressional Budget Office.
    16. Kawamoto, Takuji, 2005. "What Do the Purified Solow Residuals Tell Us about Japan's Lost Decade?," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 23(1), pages 113-148, February.
    17. Okada, Yosuke, 2005. "Competition and productivity in Japanese manufacturing industries," Journal of the Japanese and International Economies, Elsevier, vol. 19(4), pages 586-616, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nishimura, Kiyohiko G. & Nakajima, Takanobu & Kiyota, Kozo, 2005. "Does the natural selection mechanism still work in severe recessions?: Examination of the Japanese economy in the 1990s," Journal of Economic Behavior & Organization, Elsevier, vol. 58(1), pages 53-78, September.
    2. Flora Bellone & Patrick Musso & Michel Quéré & Lionel Nesta, 2006. "Productivity and Market Selection of French Manufacturing Firms in the Nineties," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 319-349.
    3. Sanghoon Ahn & Kyoji Fukao & Hyeog Ug Kwon, 2005. "The Internationalization and Performance of Korean and Japanese Firms: An Empirical Analysis Based on Micro-data," Discussion papers 05008, Research Institute of Economy, Trade and Industry (RIETI).
    4. repec:hal:spmain:info:hdl:2441/7185 is not listed on IDEAS
    5. Keun Rhee & Hak Pyo, 2010. "Financial crisis and relative productivity dynamics in Korea: evidence from firm-level data (1992–2003)," Journal of Productivity Analysis, Springer, vol. 34(2), pages 111-131, October.
    6. repec:hal:spmain:info:hdl:2441/7186 is not listed on IDEAS
    7. Kevin Fox, 2012. "Problems with (dis)aggregating productivity, and another productivity paradox," Journal of Productivity Analysis, Springer, vol. 37(3), pages 249-259, June.
    8. Yojiro Ito & Daisuke Miyakawa, 2022. "Performance of Exiting Firms in Japan: An Empirical Analysis Using Exit Mode Data," IMES Discussion Paper Series 22-E-07, Institute for Monetary and Economic Studies, Bank of Japan.
    9. Hahn, Chin-hee & Lim, Youngjae, 2002. "Post-Crisis Growth and Bankruptcy Policy Reform in Korea: Empirical Evidence," KDI Policy Studies 2002-01, Korea Development Institute (KDI).
    10. Michele Cincera, 2004. "Impact of market entry and exit on EU productivity and growth performance," ULB Institutional Repository 2013/921, ULB -- Universite Libre de Bruxelles.
    11. Inha Oh & Almas Heshmati & Chulwoo Baek & Jeong‐Dong Lee, 2009. "Comparative Analysis Of Plant Dynamics By Size: Korean Manufacturing," The Japanese Economic Review, Japanese Economic Association, vol. 60(4), pages 512-538, December.
    12. A.A. Sennikova & A.A. Pushakrev, 2020. "Evaluation of the Level of Competition in Ukraine in Industrial Production Industries," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 19(1), pages 40-59.
    13. Miles S. Kimball & John G. Fernald & Susanto Basu, 2006. "Are Technology Improvements Contractionary?," American Economic Review, American Economic Association, vol. 96(5), pages 1418-1448, December.
    14. Fukao, Kyoji & Ito, Keiko & Kwon, Hyeog Ug, 2005. "Do out-in M&As bring higher TFP to Japan? An empirical analysis based on micro-data on Japanese manufacturing firms," Journal of the Japanese and International Economies, Elsevier, vol. 19(2), pages 272-301, June.
    15. Jorgenson, Dale W. & Motohashi, Kazuyuki, 2005. "Information technology and the Japanese economy," Journal of the Japanese and International Economies, Elsevier, vol. 19(4), pages 460-481, December.
    16. Molinari, Benedetto & Rodríguez, Jesús & Torres, José L., 2013. "Growth and technological progress in selected Pacific countries," Japan and the World Economy, Elsevier, vol. 28(C), pages 60-71.
    17. repec:hal:wpspec:info:hdl:2441/7185 is not listed on IDEAS
    18. Ergun Dogan & Koi Nyen Wong, 2010. "Plant Size, Turnover and Productivity in Malaysian Manufacturing," Monash Economics Working Papers 11-10, Monash University, Department of Economics.
    19. Sanghoon Ahn, 2004. "Global Competition, Technology Spillovers and Firm Dynamics:," Econometric Society 2004 Far Eastern Meetings 793, Econometric Society.
    20. repec:spo:wpecon:info:hdl:2441/7185 is not listed on IDEAS
    21. repec:spo:wpecon:info:hdl:2441/7186 is not listed on IDEAS
    22. repec:hal:wpspec:info:hdl:2441/7186 is not listed on IDEAS
    23. Basu, Susanto & Fernald, John G. & Shapiro, Matthew D., 2001. "Productivity growth in the 1990s: technology, utilization, or adjustment?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 55(1), pages 117-165, December.
    24. Susanto Basu & John Fernald, 2001. "Why Is Productivity Procyclical? Why Do We Care?," NBER Chapters, in: New Developments in Productivity Analysis, pages 225-302, National Bureau of Economic Research, Inc.
    25. Diego Martínez, y José L. Torres & Jesús Rodríguez-López & José L. Torres, 2008. "Productivity growth and technological change in Europe and us," Economic Working Papers at Centro de Estudios Andaluces E2008/12, Centro de Estudios Andaluces.
    26. Mounir Dahmani & Mohamed Mabrouki & Adel Ben Youssef, 2022. "The Information and Communication Technologies-Economic Growth Nexus in Tunisia - A Cross-Section Dynamic Panel Approach," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 18(2), pages 161-174.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:esj:esridp:067. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: HORI nobuko (email available below). General contact details of provider: https://edirc.repec.org/data/esrgvjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.