IDEAS home Printed from
   My bibliography  Save this paper

Japanese Manufacturing Facing the Power Crisis after Fukushima: A Dynamic Computable General Equilibrium Analysis with Foreign Direct Investment


  • Nobuhiro Hosoe

    (National Graduate Institute for Policy Studies)


The Great East Japan Earthquake and the subsequent tsunami hit and destroyed the Fukushima Daiichi Nuclear Power Station. People lost trust in the safety of nuclear power plants, and the regulatory authority became reluctant to permit power companies to restart their nuclear power plants. To make up for the lost nuclear power supply, thermal power plants started operating more. They consume more fossil fuels, which raises power charges. This power crisis is anticipated to raise energy input costs and to force the domestic manufacturing industries to move out to, for example, China through foreign direct investment (FDI). Using a world trade computable general equilibrium model, with recursive dynamics installed to describe both domestic investment and FDI from Japan to China, we simulate the power crisis by assuming lost capital stock and intensified fossil fuel use by the power sector to investigate its impact on the Japanese manufacturing sectors. We found that the power crisis would adversely affect several sectors that use power intensively but would benefit the transportation equipment, electric equipment, and machinery sectors, despite the common expectation that these sectors would undergo a so-called “hollowing-out.”

Suggested Citation

  • Nobuhiro Hosoe, 2013. "Japanese Manufacturing Facing the Power Crisis after Fukushima: A Dynamic Computable General Equilibrium Analysis with Foreign Direct Investment," GRIPS Discussion Papers 13-01, National Graduate Institute for Policy Studies.
  • Handle: RePEc:ngi:dpaper:13-01

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Richard Baldwin & Toshihiro Okubo, 2014. "Networked FDI: Sales and Sourcing Patterns of Japanese Foreign Affiliates," The World Economy, Wiley Blackwell, vol. 37(8), pages 1051-1080, August.
    2. Yeaple, Stephen Ross, 2003. "The complex integration strategies of multinationals and cross country dependencies in the structure of foreign direct investment," Journal of International Economics, Elsevier, vol. 60(2), pages 293-314, August.
    3. Latorre, María C. & Bajo-Rubio, Oscar & Gómez-Plana, Antonio G., 2009. "The effects of multinationals on host economies: A CGE approach," Economic Modelling, Elsevier, vol. 26(5), pages 851-864, September.
    4. Paprzycki,Ralph & Fukao,Kyoji, 2012. "Foreign Direct Investment in Japan," Cambridge Books, Cambridge University Press, number 9781107411289, March.
    5. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:ngi:dpaper:13-01. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.