Impact of R&D Activities on Pricing Behaviors with Product Turnover

This paper is the outcome of a joint research project by the Institute of Economic Research, Hitotsubashi University, the New Supermarket Association of Japan, and INTAGE Inc. We are grateful for comments from participants at the Hosono Project Meeting at RIETI and Innovation Economics Workshop in the institute of innovation research, Hitotsubashi University. This work was supported by JSPS Grant-in-Aid for Scientific Research C (Research Project Number: 15K03349). And, this joint research was also supported by FFJ, EHESS, Paris, France. Authors would like to thank Prof. Sébastien LECHEVALIER and the all member of FFJ EHESS.This study empirically investigates the impact of research and development (R&D) activity on product turnover from Point-of-Sales (POS) data. When measuring the inflation rate in an economy, the effects of quantitative changes, volume changes, and quality changes from nominal sales changes must be removed. In order to examine the effect of R&D activities on price changes from sales data, we implement an empirical combining three datasets: weekly POS data, patent database (IIP Patent DB) data, and Survey of Research and Development data. We use regression analysis with pooling and panel regression. We observe that while the effect of price increases due to the new product introduction can be related to R&D behavior a negative effect on the price of the incumbent product is also observed. In addition, the relative prices of new and incumbent products tended to be higher for companies with active R&D expenditures. We suggest that continuous R&D is necessary to keep introducing high value products while prices are under pressure

Intangible Investment in Japan: New Estimates and Contribution to Economic Growth

The purpose of this paper is to measure intangible assets, to construct the capital stock of intangible assets, and to examine the contribution of intangible capital to economic growth in Japan. We follow the approach of Corrado, Hulten, and Sichel (2005, 2006) to measure intangible investment using the 2008 version of the Japan Industrial Productivity (JIP) Database. We find that the ratio of intangible investment to GDP in Japan has risen during the past 20 years and now stands at 11.6%, which is lower than the ratio estimated for the United States in the early 2000s. The ratio of intangible to tangible investment in Japan is also lower than equivalent values estimated for the United States. In addition, we find that, in stark contrast with the United States, where intangible capital grew rapidly in the late 1990s, the growth rate of intangible capital in Japan declined from the late 1980s to the early 2000s. In order to examine the robustness of our results, we also conducted a sensitivity analysis and found that the slowdown of the contribution of intangible capital deepening to economic growth and the recovery in Multi-Factor Productivity (MFP) growth from the second half of the 1990s observed in our base case remain unchanged even if we take on-the-job training and Japanese data with respect to investment in firm-specific resources into account.intangible investment, labor productivity, growth accounting

Intangible Investment in Japan: Measurement and Contribution to Economic Growth

The purpose of this paper is to measure intangible assets, to construct the capital stock of intangible assets, and to examine the contribution of intangible capital to economic growth in Japan. We follow the approach of Corrado, Hulten, and Sichel (2005, 2006) to measure intangible investment using the 2006 version of the Japan Industry Productivity Database. We find that the ratio of intangible investment to GDP in Japan has risen during the past 20 years and now stands at 7.5%. However, the ratios of intangible investment to GDP and of intangible to tangible investment in Japan are smaller than the values estimated for the US by Corrado et al. (2006). In addition, we find that the growth rate for intangible capital in Japan declined from the 1980s to the 1990s, which is in stark contrast to the high growth rate for intangible capital in the US in the late 1990s. Therefore, the contribution of intangible capital to total labor productivity growth in Japan is substantially smaller than in the US.

Overview of My Research at Kanagawa University

座談会 森泉陽子先生御退職記

Impact of R&D Activities on Pricing Behaviors with Product Turnover

This paper is the outcome of a joint research project by the Institute of Economic Research, Hitotsubashi University, the New Supermarket Association of Japan, and INTAGE Inc. We are grateful for comments from participants at the Hosono Project Meeting at RIETI and Innovation Economics Workshop in the institute of innovation research, Hitotsubashi University. This work was supported by JSPS Grant-in-Aid for Scientific Research C (Research Project Number: 15K03349). And, this joint research was also supported by FFJ, EHESS, Paris, France. Authors would like to thank Prof. Sébastien LECHEVALIER and the all member of FFJ EHESS.This study empirically investigates the impact of research and development (R&D) activity on product turnover from Point-of-Sales (POS) data. When measuring the inflation rate in an economy, the effects of quantitative changes, volume changes, and quality changes from nominal sales changes must be removed. In order to examine the effect of R&D activities on price changes from sales data, we implement an empirical combining three datasets: weekly POS data, patent database (IIP Patent DB) data, and Survey of Research and Development data. We use regression analysis with pooling and panel regression. We observe that while the effect of price increases due to the new product introduction can be related to R&D behavior a negative effect on the price of the incumbent product is also observed. In addition, the relative prices of new and incumbent products tended to be higher for companies with active R&D expenditures. We suggest that continuous R&D is necessary to keep introducing high value products while prices are under pressure

Heterogeneity of Capital Stocks in Japan: Classification by Factor Analysis

This paper examines the heterogeneity of capital stocks using financial statement data of publicly listed Japanese firms. We conduct factor analysis on investment rates among various capital goods and estimate factor loadings of each as its reactions to common factors like total factor productivity (TFP) shocks. Then we estimate the uniqueness for each investment rate, which is the percentage of its variance that is not explained by the common factors. If the estimated factor loadings are similar between some of the heterogeneous capital goods, it may well imply that the adjustment cost structure of these investments is also similar. Further, if some of the estimated values of uniqueness are small, it suggests that certain theoretical models may track the dynamics of the investment rates well. Our estimation results show that Building and Structure have similar factor loadings as do Machinery & Equipment, Vehicles & Delivery Equipment, and Tools, Furniture, & Fixture. This suggests that we could remedy the Curse of Dimensionality by bundling the investments that have similar factor loadings together and that identifying the functional structures of each group of capital goods can greatly improve the performance of empirical investment equations.36 p

Heterogeneity of Capital Stock and Multiple q

本論文では，日本の上場企業のデータを用いて，資本財の多様性・異質性を前提とした Multiple q の枠組みによる投資関数の推計を通じて，日本の企業の投資行動が資本財別に異なった調整費用関数に従ったものであるかを検証する．この際に，設備の新規取得行動と売却・除却行動の違いを強調し，後者の扱いによって資本財別の設備投資系列と資本ストック系列を３通り構築し，比較する．その結果，資本財別の同質性・異質性は普遍的なものではなく，設備の売却・除却行動の想定の違いや時期によって異なった結論が得られ，また想定する調整費用関数の形状にも依存することが分かった．資本財別の Partial q も試算する．By utilizing the panel data on the Japanese listed firms covering 1982-2004, we estimate investment functions within the framework of Tobin's multiple q and test the null hypothesis that capital stocks disaggregated by different usage are homogeneous. We construct the time series data on capital stocks by paying special attention on disinvestment or sales and displacement of old capital. The test result indicates that whether some capital stocks are judged homogeneous with others is not a universal feature, but instead depends on the economic environments firms face. We consider a non-linear adjustment cost function as well and compute the partial q of each capital stock by usage