Search Results

This chapter focuses on the role of trade and manufacturers’ associations in Japan’s industrialization. Focusing on two typical traditional industries, pottery and straw goods manufacturing, the various activities of associations such as quality control, technological improvement, material purchasing, and product marketing are investigated. The associations made significant contributions to the development of traditional industries, especially the industries dominated by small manufacturing firms.

This chapter uses two different cross-national quantitative datasets to address the following question: Why do some developing countries undervalue their exchange rates while others maintain overvalued exchange rates? First, it examines which countries are most likely to maintain undervalued exchange rates, using data on as many as one hundred twenty developing countries from 1975 to 2006. The data indicate that exchange rates are most undervalued when countries combine powerful industrial sectors with state control over labor and financial markets. Second, it analyzes survey data on about two thousand manufacturing firms from over fifty countries in the year 1999 to understand whether and when industrialists favor undervalued exchange rates. These analyses show that manufacturing firms are more supportive of undervalued exchange rates in countries with state-controlled labor and financial systems than they are in other conditions.

In Chapter 4 Crozet and Milet revisit the de-industrialization process and push the argument that the frontier between manufacturing and services is quite blurry. Defined as large-scale production, increasing returns, new consumption items increasingly affordable to the consumer, many services could compare with industries. And even within manufacturing industry in the usual sense, services represent an increasing share of the value added. This shift towards services within the manufacturing sector is characterized as the `servitization' of the manufacturing sector. Using French business statistics, they describe this servitization of manufacturing firms. They document a moderate, but significant and steady trend of servitization over the period and find that the phenomenon is mainly driven by changes that occur within firms. By the end of their sample period, they document that 83% of manufacturing firms sold some services, 40% sold more services than goods, and 26% did not even produce goods.

During the onset of the Korean financial crisis in 1997, an inefficient corporate bankruptcy system adversely affected Korea's economy. The inadequacies of the bankruptcy system led to poor discipline in targeting the appropriate financially distressed firms to undergo rehabilitation. Meanwhile, before the outbreak of the economic crisis, the uncertainty and delay encountered in dealing with failing firms clearly added to the distortion of the resource allocation process in Korea's economy. Hence, the natural course of action for post-crisis Korea was to undertake a sweeping reform of its corporate bankruptcy system. This chapter investigates the effects of bankruptcy policy reform in Korea by analyzing data at the firm or plant level, focusing on bankruptcy procedures administered by the courts. It examines whether manufacturing firms accepted under the reformed court-administered rehabilitation procedures experienced less persistent problems in their pre-bankruptcy total factor productivity (TFP) compared to firms undergoing the same process before the reforms. It also discusses how the reforms improved the efficiency of resource reallocation and, in turn, aggregate TFP growth.

This chapter examines the negative correlation between bank financing and corporate performance in Japan during the 1990s, focusing on firms that experienced a clear decline in profitability. It compares the subsequent profit rates for firms which did and did not receive increases in bank loans, suggesting that distressed firms which received more loans from their primary lender posted substantially higher profit rates over the four years following the distress. Between 1993 and 1997, however, increased bank loans were associated with a deterioration in operating income. These patterns were observed for manufacturing firms. After providing a historical overview of the relationship between banks and firms in Japan, the chapter looks at the impact of bank credit on firm performance before and after the bursting of the economic bubble, and also discusses two types of distress, financial and operational.

Ever since the 1960s, research and development (R&D) investment has been regarded as an important factor in the improvement of productivity levels. Numerous studies have attempted to estimate the marginal product of R&D capital or the rates of return on R&D investment, but they have continually failed to produce consistent results, with some even failing to determine the contribution of R&D to productivity growth. This chapter investigates productivity growth and R&D expenditure in Taiwan's manufacturing sector, focusing on the relationship between output (value added), employment, physical capital, and R&D capital using panel data for a sample of 136 firms over the period 1994–2000. It assesses the degree to which R&D influences productivity, examines the rates of return on R&D investment within manufacturing firms, and analyzes the differences in productivity growth and the rates of return on R&D investment between industries. Finally, the chapter tests the Schumpeterian hypothesis stating that the returns on R&D are an increasing function of firm size.

In this chapter tackles the existing debate on how the transfer of economic activities abroad, through either foreign investment or through arm-length contracts, affects a home country. It assesses manufacturing firms in Italy and their home activities, studying how they are able to change after the setting up of foreign subsidiaries abroad. It compares the debate on outsourcing in the United States and that of continental Europe, where European countries show more concern towards loss of jobs rather than services. The chapter overall focuses on foreign direct investment and how the effects of outsourcing can be viewed through this lens. What is found is that against the common notion about international outsourcing, it is shown to significantly boost performance at home.

This chapter examines tensions and conflicts in the labor processes of manufacturing firms and how those tensions have been addressed by employers and states. It considers six common strategies used to manage tensions in the labor process: coercion, social pyramiding, institutional segregation of incompatible labor systems, mutual commitment employment systems, new mechanisms of collective conflict resolution, and programs that promote worker participation. It shows that regulatory change, driven by the sometimes incompatible pressures of industrial upgrading, growing employment contingency, increased labor conflict, and the unintended outcomes of expanded worker protections, has had the effect of re-engaging government in enterprise-labor practices and in the labor process more generally.

This chapter documents, at the microlevel and the aggregate level, a slowdown in the growth rate of Japanese research productivity. Following a decade of convergence with the United States in terms of R&D inputs and outputs in the 1980s, Japanese and U.S. innovation trends diverged sharply in the 1990s. Measured in a common currency, real R&D outlays in Japan have grown much more slowly than in the United States. The gap in patent output that was closing rapidly in the 1980s began expanding again in the 1990s. The chapter concludes that there are reasonable grounds for concern about the relative performance of Japanese manufacturing firms in technology-intensive industries.

After 1940, home economists maintained an active role in manufacturing firms, power companies, and the U.S. Department of Agriculture (USDA), but under changing circumstances. This chapter discusses how home economists in both government and business confronted a series of simultaneous challenges to their professional identities as mediators of consumption. Business home economists found considerable demand for their services during World War II. Because of their reputation as authorities in health and food, manufacturers and retailers continued to rely on them as corporations support nutrition and conservation programs connected with national defense. After World War II, home economists gradually lost their institutional platform in government, as the USDA shifted away from a consumer-oriented program of research toward concerns with the management of problems associated with overproduction.