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| Srl | Item |
| 1 |
ID:
186225
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| Summary/Abstract |
Using Chinese microdata from 2000 to 2013, we document how demand shocks in export markets lead multi-product exporters to adjust markups across products. We find that, in response to positive demand shocks, quality-based competitive multi-product firms increase product markups significantly, particularly for core products, whereas cost-based competitive multi-product firms respond by reducing product markups. The reason for this is that positive foreign demand affects markups through two opposite channels: pro-innovative effects and pro-competitive effects. Pro-innovative effects are predominant among quality-based competitive multi-product firms, and these firms respond to positive foreign demand shocks by increasing product quality, prices, and markups. Pro-competitive effects are predominant among cost-based competitive multi-product firms, and these firms respond to positive foreign demand shocks by lowering product cost, prices, and markups. We demonstrate the presence of these mechanisms empirically. The results imply that firms with different competition strategies should adopt different measures in response to foreign demand shocks.
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| 2 |
ID:
092144
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| Publication |
2009.
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| Summary/Abstract |
After the prolonged stagnation that followed the post-Bubble economic collapse at the end of the 1980s, from 2002 onwards the Japanese economy exhibited its longest period of economic expansion (albeit gradual) since World War Two. As this expansion came to an end and the economy was on the verge of the downward curve of the economic cycle, it was confronted with the current financial and economic crises, which originated in the USA. Nevertheless, Japanese financial institutions had invested little in sub-prime-related financial products, and with the lessons learned from the issue of bad loans in the 1990s, Japan's financial system enjoyed greater stability than that of any other major nation. However, in the period from the end of 2008 to early 2009, Japan experienced the sharpest economic decline of any major nation.
Yet, with the worst period having ended in the spring of 2009, the International Monetary Fund (IMF) has predicted in its October 2009 forecasts that Japan will experience real economic growth of 1.7% in 2010-a higher rate than the USA (with 1.5%) or the Euro Zone (with 0.3%). Despite forecasts of a protraction of excessive US imports as a direct result of excessive US consumption, Japan is being forced to reduce its degree of reliance on exports to the USA and to make major adjustments to its export structure-both in terms of the regions to which it exports and the products that it exports. Japan also faces the task of setting itself on the path to economic growth, using the twin drivers of foreign demand and domestic demand, and this will necessitate the cultivation of domestic demand. Now, the long-term strategy for Japan is to promote the expansion of regional demand in Asia, to couple this regional demand with domestic demand, and to latch on to Asia's economic dynamism.
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