Industrial Policy, Innovation Policy, and Japanese Competitiveness

Marcus Noland

No WP07-4, Working Paper Series from Peterson Institute for International Economics

Abstract: Japan faces significant challenges in encouraging innovation and entrepreneurship. Attempts to formally model past industrial policy interventions uniformly uncover little, if any, positive impact on productivity, growth, or welfare. The evidence indicates that most resource flows went to large, politically influential “backward” sectors, suggesting that political economy considerations may be central to the apparent ineffectiveness of Japanese industrial policy. Rather than traditional industrial or science and technology policy, financial and labor market reforms appear more promising. As a group, Japan's industrial firms are competitive relative to their foreign counterparts. Japan falls behind in the heavily regulated service sector. The problems are due less to a lack of industrial policy than to an excess of regulation. Japan may have more to gain through restructuring the lagging service sector than by expending resources in pursuit of marginal gains in the industrial sector.

Keywords: Japan; industrial policy; innovation policy (search for similar items in EconPapers)
JEL-codes: F13 L52 O3 (search for similar items in EconPapers)
Date: 2007-05
New Economics Papers: this item is included in nep-ent, nep-ino and nep-reg
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://www.piie.com/publications/working-papers/i ... nese-competitiveness (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iie:wpaper:wp07-4

Access Statistics for this paper

More papers in Working Paper Series from Peterson Institute for International Economics Contact information at EDIRC.
Bibliographic data for series maintained by Peterson Institute webmaster ().