Embodied Technological Progress and the Productivity Slowdown in Japan

Concerns over the rise in the vintage of capital in the Japanese economy have focused attention on the technological progress embodied in capital. In this paper, we derive the theoretical relationship between the rate of technological progress embodied in capital, the obsolescence rate of capital, and the average vintage of capital, then we estimate these rates by using firm-level panel data from the Ministry of Economy, Trade and Industry (METI) Basic Survey of Japanese Business Structure and Activities in the period between 1997 and 2002.To measure the obsolescence rate of capital by estimating the production function, it is necessary to construct a capital stock series that takes only physical depreciation into account for each vintage capital held by each firm. To do that, we prepared industry-specific patterns of the physical depreciation ratio of capital goods, based on the pattern of the physical depreciation ratio of each type of capital goods by obtaining information from the U.S. Bureau of Labor Statistics (BLS), and the Japan Industrial Productivity Database (JIP) 2006’s investment matrices cross-classified by types of capital goods and industries. We applied these industry-specific patterns of the physical depreciation ratio of capital goods to the individual firms’ investment series, constructing a capital stock series in each firm.We measured the obsolescence rate by estimating the production function, which is similar to the one employed in Sakellaris and Wilson (2004). We added several control variables to their equations. The estimated obsolescence rate of machinery and equipment is found to be between 8 and 22 percent per annum, which is very close to the estimated ratios in other previous research using the production function. This estimation result implies that the average rate of technological progress embodied in machinery and equipment is between 0.2 and 0.4 percent in Japan. The average vintage of capital in the manufacturing industry in the 1990s was estimated to increase by almost two years, because of weak investment during that decade, and it has the effect of lowering the rate of productivity growth in the industry by 0.4 to 0.8 percentage points.ArticleRIETI Discussion Paper Series. : 08-E-017(2008)technical repor

Requirement of Tbx6 for <i>Hes7</i> expression.

<p>(A) Alignment of mouse (−1350 to −1291, Top) and human (Bottom) <i>Hes7</i> promoter sequences with two T-box binding sites (T-1306 and T-1350). (B) Luciferase assay of the H7p2.6wt promoter after transfection of NICD and Tbx6 expression plasmids. The <i>Hes7</i> promoter is activated by NICD and further enhanced by Tbx6. (C) Electromobility gel shift assay (EMSA) of the T-box containing oligos and Tbx6. Tbx6 binds to T-box containing oligos. Conditions: control lysate (Lanes 1,8), low (Lanes 2,9) and high Tbx6 lysate concentration (Lanes 3–7,10–14), supershift for Tbx6 antibody (Lanes 4,11), wild-type (WT) (Lanes 2–4,6,7,9–11,13,14) and mutant labeled oligonucleotides (Lanes 5,12) and competition with unlabeled wild-type (Lanes 6,13) and mutant (Lanes 7,14) oligonucleotides. (D,E) X-gal staining of transgenic embryos with the H7p1.4dR (WT T-box sites; n = 8) and H7p1.4dRdT (mutated T-box sites; n = 2) reporter constructs and vibratome sections of control and H7p1.4dRdT reporters. Mutated T-box binding sites of the <i>Hes7</i> promoter reporter prevent the WT X-gal staining (D). Vibratome sections of control reporter constructs with WT T-box binding sites show that all positive X-gal staining embryos also present staining in the paraxial mesoderm (E top, n = 13). By contrast, reporter constructs with mutated T-box binding sites prevent paraxial mesoderm staining and induce lateral plate and ventral mesoderm staining (E bottom, n = 2). NT, neural tube; PSM, presomitic mesoderm; HG, hindgut; LPM, lateral plate mesoderm. (F) Double immunofluorescence detection of Hes7 (magenta) and Tbx6 (green) (Phase I, n = 3; Phase II, n = 2). The anterior limit of Hes7 protein coincides or slightly exceeds the Tbx6 protein domain suggesting that the <i>Hes7</i> mRNA domain is always included in the Tbx6 protein domain.</p

<i>Hes7</i> promoter analysis with lacZ reporter transgenic embryos.

<p>The left side is a scheme of the <i>Hes7</i> promoter constructs. From top to bottom: H7p2.6wt, H7p2.6dR, H7p1.9dR, H7p1.4dR and H7p1.0dR. The promoter size relative to the transcription start is shown. The red boxes show conserved sequences according to the Vista browser <a href="http://www.plosone.org/article/info:doi/10.1371/journal.pone.0053323#pone.0053323-Dubchak1" target="_blank">[33]</a>. The yellow and green boxes show Rbpj and T-box binding sites, respectively, while the gray boxes stand for mutated sites. The two numbers show the number of X-gal positive embryos and transgene positive embryos, respectively.</p

Lengthening of the oscillatory period of the <i>Hes7</i> promoter activity by LiCl.

<p>(A,B) Timelapse imaging of E10.5 <i>Hes7</i> promoter luciferase reporter embryos in the presence of 20 and 40 mM LiCl and period quantification. The control sample shows the oscillatory promoter activity bands (White arrows), while the 20 and 40 mM LiCl-treated samples show an abnormal posterior band (Red arrows) (A). Quantification shows an increase of the oscillation period in a dose-dependent manner for the control (n = 11), 20 mM LiCl (n = 12) and 40 mM LiCl (n = 4) of 2.5 h, 2.9 h and 3.6 h (B).</p

Role of Tbx6 and Wnt pathway on <i>Hes7</i> regulation.

<p>Tbx6 binding sites and the Wnt pathway are required for normal <i>Hes7</i> expression in the PSM. Furthermore, the Gsk3 inhibitor LiCl activates the Wnt pathway and lengthens the oscillatory period of <i>Hes7</i> promoter activity.</p

Activation of <i>Hes7</i> expression by the Wnt pathway.

<p>(A,B,C) <i>Hes7</i> promoter luciferase reporter assay of the H7p2.6dR promoter reporter after co-transfection of constitutively active <i>Ctnnb1</i>, <i>Lef1</i>, <i>T</i> and <i>Tbx6</i> expression plasmids. (A,B) The H7p2.6dR promoter reporter is activated by constitutively active <i>Ctnnb1</i> and <i>Lef1</i> expression plasmids. (C) The Ctnnb1 and Lef1 mediated activation of the H7p2.6dR promoter reporter is synergistically enhanced by co-transfection of both T and Tbx6 expression plasmids. (D) <i>Hes7</i> intronic expression in <i>Wnt3a</i> hypomorph E10.5 mutant embryos. In the mutant, <i>Hes7</i> intronic expression (n = 7) is downregulated compared to the control (n = 9).</p