IDEAS home Printed from https://ideas.repec.org/p/ime/imedps/16-e-01.html
   My bibliography  Save this paper

The Effects of Barriers to Technology Adoption on Japanese Prewar and Postwar Economic Growth

Author

Listed:
  • Daisuke Ikeda

    (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (currently Financial System and Bank Examination Department, E-mail: daisuke.ikeda@boj.or.jp))

  • Yasuko Morita

    (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan @(E-mail: yasuko.morita@boj.or.jp))

Abstract

Following the start of modern economic growth around the mid- 1880s, Japan fs economy continued to substantially lag behind leading economies before World War II, but achieved rapid catch-up after the war. To explain the patterns, we build a dynamic model and examine the role of barriers to technology adoption. We find such barriers hampered catch-up in the prewar period and explain about 40 percent of the postwar miracle. Taking a historical perspective, we argue that factors that acted as barriers include low capacity to absorb technology, economic and political frictions with the outside world, and a lack of competition.

Suggested Citation

  • Daisuke Ikeda & Yasuko Morita, 2016. "The Effects of Barriers to Technology Adoption on Japanese Prewar and Postwar Economic Growth," IMES Discussion Paper Series 16-E-01, Institute for Monetary and Economic Studies, Bank of Japan.
    • Handle: RePEc:ime:imedps:16-e-01
    as

    Download full text from publisher

    File URL: http://www.imes.boj.or.jp/research/papers/english/16-E-01.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hayami, Yujiro & Ogasawara, Junichi, 1999. "Changes in the Sources of Modern Economic Growth: Japan Compared with the United States," Journal of the Japanese and International Economies, Elsevier, vol. 13(1), pages 1-21, March.
    2. Odagiri, Hiroyuki & Goto, Akira, 1996. "Technology and Industrial Development in Japan: Building Capabilities by Learning, Innovation and Public Policy," OUP Catalogue, Oxford University Press, number 9780198288022, Decembrie.
    3. Collins, William J. & Williamson, Jeffrey G., 2001. "Capital-Goods Prices And Investment, 1870–1950," The Journal of Economic History, Cambridge University Press, vol. 61(1), pages 59-94, March.
    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. Esteban-Pretel, Julen & Sawada, Yasuyuki, 2014. "On the role of policy interventions in structural change and economic development: The case of postwar Japan," Journal of Economic Dynamics and Control, Elsevier, vol. 40(C), pages 67-83.
    6. Otsu Keisuke, 2009. "A Neoclassical Analysis of the Postwar Japanese Economy," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-30, May.
    7. Lawrence J. Christiano, 1989. "Understanding Japan's saving rate: the reconstruction hypothesis," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 13(Spr), pages 10-25.
    8. Diego Comin & Mark Gertler, 2006. "Medium-Term Business Cycles," American Economic Review, American Economic Association, vol. 96(3), pages 523-551, June.
    9. -, 2008. "Foreign Investment in Latin America and the Caribbean 2007," La Inversión Extranjera Directa en América Latina y el Caribe, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1136 edited by Eclac, September.
    10. Diego Comin & Bart Hobijn, 2011. "Technology Diffusion and Postwar Growth," NBER Chapters, in: NBER Macroeconomics Annual 2010, volume 25, pages 209-246, National Bureau of Economic Research, Inc.
    11. Ngai, L. Rachel, 2004. "Barriers and the transition to modern growth," Journal of Monetary Economics, Elsevier, vol. 51(7), pages 1353-1383, October.
    12. Fumio Hayashi & Edward C. Prescott, 2008. "The Depressing Effect of Agricultural Institutions on the Prewar Japanese Economy," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 573-632, August.
    13. Diego Comin & Bart Hobijn, 2010. "An Exploration of Technology Diffusion," American Economic Review, American Economic Association, vol. 100(5), pages 2031-2059, December.
    14. Paprzycki,Ralph & Fukao,Kyoji, 2012. "Foreign Direct Investment in Japan," Cambridge Books, Cambridge University Press, number 9781107411289, January.
    15. Shuhei Aoki & Julen Esteban-Pretel & Tetsuji Okazaki & Yasuyuki Sawada, 2010. "The Role of the Government in Facilitating TFP Growth during Japan’s Rapid-growth Era," Palgrave Macmillan Books, in: Keijiro Otsuka & Kaliappa Kalirajan (ed.), Community, Market and State in Development, chapter 4, pages 21-44, Palgrave Macmillan.
    16. Acemoglu, Daron & Woodford, Michael (ed.), 2011. "NBER Macroeconomics Annual 2010," National Bureau of Economic Research Books, University of Chicago Press, number 9780226002125, July.
    17. Hulten, Charles R, 1992. "Growth Accounting When Technical Change Is Embodied in Capital," American Economic Review, American Economic Association, vol. 82(4), pages 964-980, September.
    18. Diego A. Comin & Martí Mestieri, 2010. "An Intensive Exploration of Technology Diffusion," NBER Working Papers 16379, National Bureau of Economic Research, Inc.
    19. Greenwood, Jeremy & Hercowitz, Zvi & Krusell, Per, 1997. "Long-Run Implications of Investment-Specific Technological Change," American Economic Review, American Economic Association, vol. 87(3), pages 342-362, June.
    20. Parente, Stephen L & Prescott, Edward C, 1994. "Barriers to Technology Adoption and Development," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 298-321, April.
    21. R. Anton Braun & Toshihiro Okada & Nao Sudou, 2006. "U.S. R&D and Japanese Medium Term Cycles," Bank of Japan Working Paper Series 06-E-6, Bank of Japan.
    22. Charles R. Hulten, 1992. "Growth Accounting When Technical Change is Embodied in Capital," NBER Working Papers 3971, National Bureau of Economic Research, Inc.
    23. Keijiro Otsuka & Kaliappa Kalirajan (ed.), 2010. "Community, Market and State in Development," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-29501-8, December.
    24. Stephen L. Parente & Richard Rogerson & Randall Wright, 2000. "Homework in Development Economics: Household Production and the Wealth of Nations," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 680-687, August.
    25. Greenwood, Jeremy & Krusell, Per, 2007. "Growth accounting with investment-specific technological progress: A discussion of two approaches," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1300-1310, May.
    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. Hasumi, Ryo & Iiboshi, Hirokuni & Nakamura, Daisuke, 2018. "Trends, cycles and lost decades: Decomposition from a DSGE model with endogenous growth," Japan and the World Economy, Elsevier, vol. 46(C), pages 9-28.
    2. Kosuke Aoki & Naoko Hara & Maiko Koga, 2017. "Structural Reforms, Innovation and Economic Growth," Bank of Japan Working Paper Series 17-E-2, Bank of Japan.
    3. Kim, Yong Jin & Lee, Duk Hee, 2020. "Technology convergence networks for flexible display application: A comparative analysis of latecomers and leaders," Japan and the World Economy, Elsevier, vol. 55(C).
    4. Rachana Vidhi & Prasanna Shrivastava & Abhishek Parikh, 2021. "Social and Technological Impact of Businesses Surrounding Electric Vehicles," Clean Technol., MDPI, vol. 3(1), pages 1-17, February.

    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. Aoki, Shuhei, 2011. "A Model of Technology Transfer in Japan's Rapid Economic Growth Period," MPRA Paper 29235, University Library of Munich, Germany.
    2. Bianchi, Francesco & Kung, Howard & Morales, Gonzalo, 2019. "Growth, slowdowns, and recoveries," Journal of Monetary Economics, Elsevier, vol. 101(C), pages 47-63.
    3. Chen, Chaoran, 2020. "Technology adoption, capital deepening, and international productivity differences," Journal of Development Economics, Elsevier, vol. 143(C).
    4. 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.
    5. Otsu Keisuke, 2009. "A Neoclassical Analysis of the Postwar Japanese Economy," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-30, May.
    6. Shuhei Aoki & Julen Esteban-Pretel & Tetsuji Okazaki & Yasuyuki Sawada, 2010. "The Role of the Government in Facilitating TFP Growth during Japan’s Rapid-growth Era," Palgrave Macmillan Books, in: Keijiro Otsuka & Kaliappa Kalirajan (ed.), Community, Market and State in Development, chapter 4, pages 21-44, Palgrave Macmillan.
    7. Toshihiro Okada, 2018. "International R&D Spillovers, Innovation by Learning from Abroad and Medium-Run Fluctuations," Discussion Paper Series 183, School of Economics, Kwansei Gakuin University.
    8. Eaton, Jonathan & Kortum, Samuel, 2001. "Trade in capital goods," European Economic Review, Elsevier, vol. 45(7), pages 1195-1235.
    9. Hendricks, Lutz, 2000. "Equipment investment and growth in developing countries," Journal of Development Economics, Elsevier, vol. 61(2), pages 335-364, April.
    10. Roberta Piergiovanni & Enrico Santarelli, 2013. "The more you spend, the more you get? The effects of R&D and capital expenditures on the patenting activities of biotechnology firms," Scientometrics, Springer;Akadémiai Kiadó, vol. 94(2), pages 497-521, February.
    11. Alonso-Carrera, Jaime & Raurich, Xavier, 2018. "Labor mobility, structural change and economic growth," Journal of Macroeconomics, Elsevier, vol. 56(C), pages 292-310.
    12. Dieppe,Alistair Matthew & Francis,Neville Ricardo & Kindberg-Hanlon,Gene, 2021. "Technology and Demand Drivers of Productivity Dynamics in Developed and Emerging Market Economies," Policy Research Working Paper Series 9525, The World Bank.
    13. Dieppe, Alistair & Francis, Neville & Kindberg-Hanlon, Gene, 2021. "Technological and non-technological drivers of productivity dynamics in developed and emerging market economies," Journal of Economic Dynamics and Control, Elsevier, vol. 131(C).
    14. Enrico Spolaore & Romain Wacziarg, 2012. "Long-Term Barriers to the International Diffusion of Innovations," NBER International Seminar on Macroeconomics, University of Chicago Press, vol. 8(1), pages 11-46.
    15. Ferraro, Domenico, 2017. "Volatility and slow technology diffusion," European Economic Review, Elsevier, vol. 96(C), pages 18-37.
    16. Caselli, Francesco & Wilson, Daniel J., 2004. "Importing technology," Journal of Monetary Economics, Elsevier, vol. 51(1), pages 1-32, January.
    17. Gollin, Douglas & Parente, Stephen L. & Rogerson, Richard, 2007. "The food problem and the evolution of international income levels," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1230-1255, May.
    18. Roberto Samaniego & Juliana Sun, 2020. "The Relative Price of Capital and Economic Structure," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 37, pages 127-155, July.
    19. 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.
    20. Ricardo Azevedo Araujo & Gilberto Tadeu Lima, 2008. "Investment-Specific Technological Change, Investment Sectoral Allocation and Human Capital Accumulation in a Model of Export-Led Growth," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting] 200807211332520, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

    More about this item

    Keywords

    Japan; Barriers to technology adoption; Investment specific technology; Catch-up; Postwar miracle;
    All these keywords.

    JEL classification:

    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ime:imedps:16-e-01. 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: Kinken (email available below). General contact details of provider: https://edirc.repec.org/data/imegvjp.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.