2007 Fiscal Year Final Research Report Summary
An Empirical Study on Impacts of Allocative Distortions on noductivity of the Japanese Economy
| Project/Area Number |
18530157
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Economic statistics
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| Research Institution | Nagoya University |
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Principal Investigator |
NEMOTO Jiro Nagoya University, Graduate School of Econornics (20180705)
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| Project Period (FY) |
2006 – 2007
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| Keywords | productivity analysis / efficiency analysis / technical efficiency / allocative efficiency / translog distance function / Social Prefectural Account / transmission-distribution electricity |
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| Research Abstract |
This study aims to analyze efficiency and productivity of the Japanese economy using new techniques to uncover why the Japanese economy stagnated so long during the 1990s. A standard method of total factor productivity is not adequate for this purpose because it assumes that no inefficiency exists. Most previous studies of efficiency analysis on the Japanese economy are also unsatisfactory because they focus on measurement of technical efficiency and ignore allocative efficiency. We measure allocative efficiency jointly with technical one so that the impacts of resource distortions on cost and productivity axe evaluated. Kumbhamar and Wang (2006), J. of Economet, 419-440, already estimate the translog distance function model incorporating both allocative and technical efficiencies. We extend this model by exploiting a conversion equation between input and output distance functions, which simplifies the nonlinear programming problem measuring the optimal levels of inputs. Based on this analytical framework, three empirical studies are conducted. Firstly regional macro economy is analyzed with a panel data on 47 social prefectural account. The result shows that allocative inefficiency of the Japanese economy started to improve accompanied by rapid labor adjustment since Heisei financial crisis 1997. Secondly, the transmission-dist: elution electricity is examined with a panel on nine Japanese electric utilities. This study shows that the cost efficiency was continuously improved during the late 1990s that coincide with the startup of the regulatory reform. Thirdly solid waste management activity is analyzed to evaluate productivity and efficiency of the public sector. The results show that our efficiency analysis is promising as a benchmarking tool for public sector
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