KIM Sangho
   Department     College of International Management
   Position   Professor
Language English
Publication Date 2015/08
Type Research paper (Academic/Professional Journal)
Peer Review Peer reviewed
Title Returns to Scale, Markup and Total Factor Productivity for the Japanese Manufacturing Industry
Contribution Type Corresponding
Journal Korea and the World Economy
Volume, Issue, Page 16(2),pp.195-222
Author and coauthor Keunjae Lee
Details This study utilizes industrial panel data for the Japanese manufacturing industry to decompose the Solow residual into scale economies, markup effects, and technical change. Empirical results show that the economic growth during 1970-85 was driven mostly by scale economies resulting from large capital investments rather than by pure technological progress. The results also indicate that productivity growth started to decline in 1985 when manufacturers tried to contest eroding price competitiveness with economies of scale, which is much earlier than implied by the original Solow residual. Furthermore, sectoral estimation suggests that productivity grew much faster in the high-growth sector than in the low-growth sector, suggesting that international competition caused the high-growth sector to be more efficient than the low-growth sector.
ISSN 2234-2346