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Schober, F., Kishida, T., Arayama, Y. (Eds.) (1999). Restructuring the Economy of the 21st Century in Japan and Germany. Duncker & Humblot.
Schober, Franz; Kishida, Tamiki and Arayama, Yuko. Restructuring the Economy of the 21st Century in Japan and Germany. Duncker & Humblot, 1999. Book.
Schober, F, Kishida, T, Arayama, Y (eds.) (1999): Restructuring the Economy of the 21st Century in Japan and Germany, Duncker & Humblot, [online]


Restructuring the Economy of the 21st Century in Japan and Germany

Editors: Schober, Franz | Kishida, Tamiki | Arayama, Yuko

Schriften zu Regional- und Verkehrsproblemen in Industrie- und Entwicklungsländern, Vol. 65


Additional Information

Book Details



This book contains the revised and updated versions of twelve papers which were presented at the 17th joint seminar of the faculties of economics of the Universities of Nagoya and Freiburg. The seminar took place in 1997 in Nagoya and marked the 25th anniversary of the cooperation between both faculties. The subjects of the book concentrate on long-term economic and business issues common to Japan and Germany on the turn of our century.

Firstly, both countries experience continuing and interrelated problems in the labor market, budget deficits, demographic changes and the future of the social security system. Secondly, globalization, technical progress and shift of social values lead to structural changes of the economy and its institutions, particularly to deregulations and network economies. As a consequence, new ways of cooperation between firms, customers and suppliers will be established. Thirdly, the network economy changes also the inner structure and management of the companies in both countries including new organizational patterns such as the holding company or the virtual enterprise, the tight cooperation of small and medium-sized companies, human resource management and compensation.

Although the broad issues in both countries - as in other mature economies - are essentially the same, the details under the surface are different and therefore ask for different solutions. The identification of these similarities and differences by theoretical and empirical methods constituted a key objective of the seminar, as well as of previous seminars.

Table of Contents

Section Title Page Action Price
Preface of the Series Editors 7
Table of Contents 9
Theodor Dams: Twenty-Five Years of Cooperation between Nagoya and Freiburg 11
Masatsugu Tsuji: Envisioning the Japanese Economic System in the 21st Century in Relation to Economies of Network 15
Introduction 15
A. Economies of Network 16
I. Definition 16
II. Contents and Basis of Economies of Network 17
III. Economies of Scale and Economies of Scope 18
IV. Industrial Transformation of the Japanese Economy 20
B. Japanese System I - Employment System 20
I. Characteristics of the Japanese Employment System 20
II. Economic Foundations of the Japanese Employment System 22
C. Japanese System II - Industrial Group 23
I. Horizontal Group: Zaibatsu Group 24
II. Vertical Group: Hierarchical Production Structure 24
III. Economic Basis of the Hierarchical Production System 27
D. Economies of Network and the Japanese System 28
I. Traditional Information Interchange inside Japanese Firms 29
II. LAN in Japanese Firms 29
III. Transformation of the U.S. Economy and Economies of Network 30
E. Concluding Remarks: The Japanese System in the 21st Century 32
I. Transformation of the Japanese Economy and the Japanese System 33
II. Possible Reform of the Japanese System 33
Acknowledgment 35
References 35
Jürgen Jerger: Nominal Wage Setting and Employment at the Aggregate and Sectoral Level 37
A. Introduction 37
Β. Nominal Wages and Employment 38
I. Purchasing Power vs. Cost Aspect of Wages 38
II. Nominal Wage Setting Rules 39
C. Sectoral and Aggregate Effects of Nominal Wage Variations 41
I. Some Preliminary Remarks 41
II. The Sectoral Level 42
III. The Aggregate Level 45
IV. Results 46
D. An Empirical Analysis of Sectoral Data for Germany 49
E. Conclusions 60
References 61
Alexander Spermann: Job Creation in the Low-Wage Sector - The Role of Employment Subsidies 65
A. Introduction 65
B. The Analytical Framework 66
C. Employment Subsidies in a One-Sector Model of Equilibrium Unemployment 67
D. Discussion of the Standard Result 69
E. General Problems of Employment Subsidies 73
F. Conclusions 74
References 74
Hiroyasu Uemura / Akinori Isogai / Akira Ebizuka: The Hierarchical Market-Firm Nexus and the Institutional Analysis of the Recent Japanese Economy 77
Introduction 77
A. Institutional Analysis of \"the Hierarchical Market-Firm Nexus 78
I. Institutional Analysis and the Régulation Approach 78
II. \"Wage-Labour Nexus\" and \"Market-Firm Nexus 79
III. The Hypothesis of \"the Hierarchical Market-Firm Nexus 80
B. \"The Hierarchical Market-Firm Nexus\" as a Set of Coordinating Mechanisms in Economic Dynamics 84
I. Structures of the Incentive Mechanism 84
II. Cost of Job Change and \"Institutionalized Job-Loss Costs 86
III. Flexibility of Wages and Employment 88
IV. Structural Compatibility and Productivity-Enhancing Mechanism in the \"Hierarchical Market-Firm Nexus 92
V. Socio-economic Reproduction of the Hierarchical Market-Firm Nexus 94
C. Japanese Economy in the 1990s and Structural Shifts in the Hierarchical Market-Firm Nexus 96
I. The Hierarchical Market-Firm Nexus and the Demand Regime 96
II. The \"Heisei Recession\" Compared with Previous Ones 101
III. The Hierarchical Market-Firm Nexus in the \"Heisei Recession 109
D. Concluding Remarks 114
References 116
Tadashi Yagi: The Roles of the Public Sector Toward the 21st Century 121
A. Introduction 121
B. Public Policies for the Aging Society 121
I. The Optimal Long-term Care System 121
II. Advancement of Women in the Society 125
C. The Land Problem in Japan and the Tax System 126
I. The Japanese Tax System for Land Holding 127
II. Inequality between Income with and without Imputed Rent 128
III. The Effect of Taxation on Income Redistribution 128
IV. Tax Reform to the Comprehensive Income Tax System 129
D. Building of Information Infrastructure 131
I. Model 132
II. Optimal Public Investment Path 133
III. Public Investment in the Optical Information Highway 136
Appendix 137
References 141
Akihiro Noguchi: Accounting for Stock Options in Japan 143
A. Introduction 143
Β. Plans by Issuing Stock Purchase Warrants With Debt 144
C. Plans by the New Business Promotion Act (Before Amendment in 1997) 146
D. Plans by Using Rights to Purchase Treasury Stocks 147
E. Plans by Issuing Stock Purchase Rights 148
F. Plans Other Than Above 148
I. Plans by the Principal Stockholder 149
II. Plans by the Parent Company 149
G. Summary 150
References 150
Hiroshi Tsukada: Budget Deficits in Japan 153
A. Introduction 153
B. Historical Trends in Public Finance and Current Fiscal Situation 153
I. Situation until First Oil Crisis in 1973 153
II. Fiscal Deficits in 1970s 154
III. Efforts to Reduce Fiscal Deficits in the 1980s 155
IV. The Bubble Economy 155
V. Current Fiscal Situation 157
C. Conclusion 158
Appendix 159
Franz Schober: Information Technology and Organizational Change. How Stable is the Virtual Enterprise? 165
A. Introduction 165
B. Current Organizational Trends and the Role of IT 167
I. Generic Coordination Mechanisms 167
II. Intra-Organizational Coordination and IT 168
III. Interorganizational Coordination and IT 169
IV. Market Coordination and IT 170
C. An Economic Analysis of the Virtual Enterprise 171
I. Formal Analysis 171
II. Numerical Examples 174
III. Switching Costs 177
D. Summary and Conclusions 179
References 179
Günter Müller / Holger Eggs / Jürgen Englert: Restructuring of Co-operation for Small and Medium-Sized Enterprises by Electronic Networks 181
A. Introduction 181
B. Background of the Study 181
C. The Empirical Study 184
I. Formulation of the Problem 184
II. Design of the Study 185
III. Case Studies 187
D. Crucial Factors for Restructuring SMEs 188
I. IT Aspects of Networking 188
II. Organisational Aspects of Networking 189
III. Cultural and Institutional Aspects of Networking 193
E. Extensions of the Study 194
References 194
Takeshi Yoshida: Multiplication of Measurement and Management of Intellectual Capital in Firms 197
A. Introduction 197
B. Multiplication of Measurement and Management of Intellectual Capital 198
I. Measurement of Knowledge: Visualizing Intellectual Capital 200
II. Management of Knowledge 202
1. Visualizing Knowledge Management (KM) Process 202
2. Process Perspectives on KM 202
3. New Direction of KM - Frontline or Bottom-up Knowledge Creation 203
C. Concluding Remark: Multiplication of Management (KM) and Measurement (IC): Wise Utilization of Knowledge 204
References 205
Tamiki Kishida: The Holding Company - An Analysis of Its Organizational Form 207
A. Introduction 207
Β. Merits and Demerits of the Holding Company 208
I. Definition 208
II. Holding Companies Abroad 209
1. The Holding Company in the USA 209
2. The Holding Company in Europe 210
3. Merits of the Holding Company 211
4. Demerits of the Holding Company 212
C. The Holding Company as an Organizational Form 215
I. Stagewise Developmental Model of Organization and the Holding Company 215
II. Decentralization versus Centralization and the Holding Company 217
III. Strategy of Environmental Management and the Holding Company 218
D. Concluding Remarks 220
References 223
Appendix: List of the Publications of Previous Joint Nagoya/Freiburg Seminars 225
Contributors and Editors 227