Corporate Failure, Supply Shocks and Government Bailouts: A Case Study of Aloha Airlines

This paper investigates the bankruptcy of Aloha Airlines and its exit from Hawaii’s interisland passenger market in order to examine whether government intervention is warranted based on the presumed benefits to the general public. A regression analysis of interisland traffic volume does not identify any substantial decline in interisland passengers immediately following Aloha’s closure. A government’s decision to bailout a firm should incorporate information on market structure, as the presence of excess capacity can alleviate damage to consumers.bankruptcy; exit; excess capacity; bailout; airline

Policy-based finance, financial regulation, and financial sector development in Japan

The authors state the Japanese government's role in creating a macroeconomic and financial environment conducive to rapid industrialization went beyond maintaining price stability. The government created a stable but segmented and tightly regulated financial system that favored the financing of industry over other sectors of economic activity. Lending practices, the direction of policy based finnance, and the structure of Japan's financial system changed over time, but one thing stayed constant: the authorities'vision. Some observers maintain that Japanese policies - emphasizing the development of internationally competitive industries - retarded economic growth. And government policies were not the only or even the most important factor in Japan's success. One key to success was government agencies'close cooperation with the private sector, and the government's reliance on privately owned and managed corporations to achieve government-favored industrial goals. Japan's financial system was quite different from Anglo-American and continental European financial systems. The authors discuss some characteristics of the Japanese system in the high growth era: 1) the preponderent role of indirect finance; 2) the"overloan"position of large commercial banks; 3) the"overborrowing"of industrial companies; 4) artificially low interest rates; 5) the segmentation and fragmentation of the financial system; 6) the underdevelopment of securities markets and institutional investors; 7) the key role played by the main bank system; 8) the relations between banks and industry; 9) the different roles debt and equity played in the Japanese system; 10) the role large conglomerate groups, especially general trading companies, played in channeling funds to small firms at the industrial periphery; and 11) the role of policy-based financial institutions. These features evolved in the context of high savings rates and an accumulation of assets, mobilized mostly through deposit institutions, including the postal savings system, and transformed into short- and long-term and risky loans through commercial and long-term credit banks as well as specialized government financial institutions. Are hard work and good management the secrets of Japan's success? Hard work may be as much a symptom as a cause of economic success. But good management has unquestionably been a key to Japan's economic success. Whether Japan's approach is better than others is more difficult to answer. Japan may have overtaken several European countries butwas still lagging behind the US and a few European countries in per capita income expressed in purchasing power parity terms. And although the Japanese approach played a significant part in promoting industrialization and accelerating economic growth during the period of reconstruction and high growth, it also entailed significant long-term costs - in terms of poor-quality housing and other urban infrastructure. And the excesses of the 1980s and Japan's current economic recession undermine claims about its ability to continuously outperform other countries.Banks&Banking Reform,Payment Systems&Infrastructure,Financial Intermediation,Financial Crisis Management&Restructuring,Decentralization,Financial Crisis Management&Restructuring,Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform,Financial Intermediation

Integration of North and South American Players in Japan's Professional Baseball Leagues

Teams in Japan’s two professional baseball leagues began to add foreign players to their rosters in the early 1950s, with the average number of foreign players per team reaching 5.79 in 2004. One reason for their increased use of foreign players was that foreign hitters substantially outperformed Japanese hitters. We show that the pace of team integration with African-American, Latino, and Caucasian players varied substantially across teams, a pattern also observed in North American professional baseball leagues. Using team data for the 1958-2004 seasons, econometric analysis shows that good teams that experienced a poor season played foreign players more frequently in the next season’s games.Baseball, Japan, integration, NPB, sports, team

The Designated Hitter Rule in Baseball as a Natural Experiment

All but two professional baseball leagues have adopted the “designated hitter” (DH) rule, which allows a team’s manager to designate a player to bat at the plate and run the bases in place of another player, usually the team’s pitcher. Unlike the team’s other players, the designated hitter does not take the field to play defense. This paper provides a survey of a large literature investigating the DH rule’s effect on the incentives of pitchers to hit batters and on changes in the number of hit batsmen. We also consider whether the DH rule provides a good example of a natural experiment, as some professional baseball leagues were “treated” with the DH rule and others were not treated.baseball, designated hitter, moral hazard, natural experiment, Japan

The Designated Hitter Rule and Team Defensive Strategy in Japan’s Professional Baseball Leagues

Economists have debated whether and why the designated hitter (DH) rule in North American major league baseball led to an increase in hit-batsmen. We use data from Japan's professional baseball leagues, the Pacific League (DH rule) and the Central League (no DH rule), to re-examine this question. Initial empirical findings reveal increases in hit-batsmen in the Pacific League after we control for the DH’s effect on team batting performance. After controlling for interactions between pitcher quality and the DH rule, we find that the DH rule induced changes in team defensive strategies and, consequently, an increase in hit-batsmen. Subsequent rule changes reduced the effectiveness of these strategies.

Property Right Regimes in Japanese Baseball: A New Look at the Rottenberg Invariance Proposition

We examine the 1965 change from an open-bidding to a draft system for new players in Japan's professional baseball leagues. Our theoretical analysis, which incorporates two factors commonly observed in professional sports, imperfect information on new recruits and outlier, highly skilled players, calls into question the magnitude of the changes that would be expected upon changing the rule structure for recruiting new players. Our empirical finds results that are strikingly similar to results from U.S. data. One baseball league in each country (the Central in Japan, the American in U.S.) possessed a dominant team (the Giants in Japan, the Yankees in the U.S.) under the open-bidding system, while the other league (the Pacific in Japan, the National in the U.S.) had substantially more equality. After the 1965 rule change in both countries, the leagues previously with a dominant team become substantially more competitive. In the other more competitive league, there is less change. The similarity of the effects generated across cultures and countries from the rule changes shows the important of the structure of property rights in any competitive framework.

The effect of leg hyperthermia using far infrared rays in bedridden subjects with type 2 diabetes mellitus

We examined the effect of leg hyperthermia on oxidative stress in bedridden subjects with type 2 diabetes mellitus using 15-min sessions of far infrared rays over a two-week period. Four subjects (male 1, female 3) incapacitated by a stroke were recruited for this study. All patients were admitted to Takahashi Central Hospital and ate the same hospital meals. Fasting plasma glucose, HbA1c, tumor necrosis factor (TNF)alpha, free fatty acid, leptin, adiponectin and plasma 8-epi-prostaglandin F2alpha (8-epi-PGF2alpha) levels as a marker of oxidative stress were measured on admission, just before and 2 weeks after local heating of the leg. Results showed that plasma total 8-epi-PGF2alpha levels were decreased significantly while TNFalpha levels were increased significantly. On the other hand, glucose, HbA1c, free fatty acid, leptin and adiponectin levels were not changed during the study period. These results suggest that repeated leg hyperthermia may protect against oxidative stress.</p

Inhibitory Effect of 1α-Hydroxyvitamin D3 on N-nitrosobis (2-oxopropyl)Amine-induced Cholangiocarcinogenesis in Syrian Hamsters

Sixty-three male 5-week-old Syrian hamsters received the carcinogen N-nitrosobis(2-oxopropyl)amine (BOP) s.c. in 5 weekly injections (the first, 70mg/kg body, and the remaining, 20mg/kg each). The hamsters that received BOP were given intragastric administration of 0.2ml of medium chain triglyceride (MCT) with or without 0.04μg of 1α-hydroxyvitamin D3 [1α(OH)D3] through a feeding tube for 12 weeks. Thus, 3 groups were assigned:Group 1;BOP alone (n＝20), Group 2;BOP＋MCT (n＝18) and Group 3;BOP＋1α(OH)D3 (n＝25). The mean body weight of Group 3 was lower than those of Groups 1 and 2 at the end of the experiment (p＜0.001,Tukey-Kramer HSD test). At the end of week 12, all surviving hamsters were put to sleep. The incidences of liver tumors were 80%, 72% and 32% in Groups 1, 2 and 3, respectively. The incidence of tumors in Group 3 was significantly lower than in Group 1 and Group 2 (p＜0.05, χ2-test). All tumors were cholangiocarcinoma. These results indicated that BOP-induced cholangiocarcinogenesis was suppressed by the supplemental administration of 1α(OH)D3

Skeletal muscle mass and vitamin D

A clearer understanding of skeletal muscle mass (SMM) in middle-aged and elderly individuals is important for maintaining functionality. In the present study, age-related changes in SMM, the threshold of SMM with walking difficulty, intestinal nutrient absorption rate, and various serum factors were examined in Japanese populations of different ages. We used 24-h creatinine excretion as a measure of total body SMM. Age-related decreases in SMM, intestinal nutrient absorption rates, and serum 25-hydroxyvitamin D [25(OH)D] concentrations were significantly higher in women than in men. The cut-off values for SMM (kg), its percentage of total body weight (BW), the SMM index [SMMI] (Kg / m2), and creatinine height index (CHI) (%) in elderly individuals with walking difficulty were approximately 8-10 kg, 17-20% of BW, 3.9-4.6 kg / m2, and 44%, respectively. Serum 25(OH)D concentrations were closely associated with SMM (kg, % of BW, kg / m2) and CHI (%) as well as the intestinal absorption rates of nitrogen (%) and phosphorus (%) in women, but not in men. The present results demonstrate that vitamin D is an important metabolic factor in skeletal muscle, and contributes to the optimal management of skeletal muscle and the prevention of sarcopenia