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Is the Japanese Distribution System Really Inefficient?

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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.

Suggested Citation

  • Takatoshi Ito & Masayoshi Maruyama, 1990. "Is the Japanese Distribution System Really Inefficient?," NBER Working Papers 3306, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3306
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    References listed on IDEAS

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    1. Flath, David, 1989. "Vertical restraints in Japan," Japan and the World Economy, Elsevier, vol. 1(2), pages 187-203, March.
    2. 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.
    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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    Cited by:

    1. ANDREW R. Dick, 1993. "Japanese Antitrust: Reconciling Theory And Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 11(2), pages 50-61, April.
    2. 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.
    3. David E. Weinstein, 1997. "Foreign Direct Investment and Keiretsu: Rethinking U.S. and Japanese Policy," NBER Chapters,in: The Effects of U.S. Trade Protection and Promotion Policies, pages 81-116 National Bureau of Economic Research, Inc.
    4. 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, NBER-EASE Volume 8, pages 139-156 National Bureau of Economic Research, Inc.
    5. 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.
    6. 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.
    7. 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.).
    8. 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.
    9. Noland, Marcus, 1995. "Why are prices in Japan so high?," Japan and the World Economy, Elsevier, vol. 7(3), pages 255-261, September.
    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. David Flath, 2003. "Regulation, Distribution Efficiency, and Retail Density," NBER Working Papers 9450, National Bureau of Economic Research, Inc.
    12. Marcus Noland, 1993. "Protectionism in Japan," Open Economies Review, Springer, vol. 4(1), pages 67-81, March.

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