2017 Fiscal Year Research-status Report
Analysis on TFP Sources of Growth to Enhance Competitiveness
| Project/Area Number |
17K03745
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| Research Institution | Ritsumeikan Asia Pacific University |
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Principal Investigator |
キム サンホ 立命館アジア太平洋大学, 国際経営学部, 教授 (20635461)
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| Project Period (FY) |
2017-04-01 – 2022-03-31
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| Keywords | firm heterogeneity / stochastic frontier / productivity sources / firm trade / TFP growth / technical change / TE change / Japanese manufacturing |
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| Outline of Annual Research Achievements |
In FY2017, I have drafted out a working paper, “Firm Heterogeneity in Sources of Total Factor Productivity (TFP) Growth: Evidence from Japanese Manufacturing Firms.” The working paper I finished in FY 2017 was supposed to be done in FY 2020, but I did it earlier than the original research plan in order to utilize available data and continue a research I did in FY 2016, which decomposed total factor productivity into four factors without emphasizing firm heterogeneity in productivity growth.
This study decomposed TFP growth into its components with emphasis on firm heterogeneity. The study utilized a stochastic frontier approach to decompose TFP growth into technical progress (TP), technical efficiency change (TEC), scale efficiency change (SEC) and allocative efficiency change (AEC). The approach acknowledges that changes in technical efficiency can also contribute to productivity growth, assuming that firms do not fully utilize existing technology because of various non-price and organizational factors, which causes technical inefficiencies in production. The study further released the restrictive assumptions about constant returns to scale and perfect competition that can introduce bias in TFP estimation.
After presenting the working paper at the five international conferences to get feedback from colleagues, I submitted it to an academic journal for possible publication.
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| Current Status of Research Progress |
Current Status of Research Progress
1: Research has progressed more than it was originally planned.
Reason
As I mentioned above, the working paper I finished in FY 2017 was supposed to be done in FY 2020. According to my original research proposal, I planned to apply a firm heterogeneity model to decompose total factor productivity growth into technical progress, technical change, technical efficiency change, allocative efficiency change, and scale efficiency change across firm groups. Thus, there is a change in sequence in my research activity and research plan in FY 2017, but one-year worth of research was finished successfully.
Currently, I am working on a dynamic model to analyze impacts of macro policy on TFP growth, which is supposed to be done in FY 2017-2018 in my Disbursement Application Form. I will pursue this research in FY 2018-2019. Therefore, I am progressing as expected even though there is a change in the order of research activity compared with the research plan.
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| Strategy for Future Research Activity |
In FY 2018, I am doing a research on a dynamic model to investigate TFP in the Japanese Manufacturing Industry. This research is to analyze production structure of the Japanese manufacturing industry by adopting a dynamic dual approach in which labor and capital are quasi-fixed inputs. Empirical results will suggest how the factors adjust to changes in government policies affecting factor prices.
In FY 2019, I will work on a research about TFP growth under dynamic factor adjustment. This study will apply a dynamic adjustment-cost framework to estimate a dynamic productivity growth for the Japanese manufacturing industry. Contrary to a static productivity growth, the dynamic productivity growth acknowledges that firms don’t usually operate at the optimal input level. This research will provide dynamic mechanism in which government policies affect factor adjustment and TFP growth of the economy.
In FY 2020, I will utilize a technology model to investigate TFP growth after allowing for industry heterogeneity. In 2021, I will devise a cost function model to decompose TFP growth into the four factor components.
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Research Products
(5 results)
