Capital Accumulation, Vintage and Productivity: The Japanese Experience

Taiji Hagiwara and Yoichi Matsubayashi ()
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Taiji Hagiwara: Graduate School of Economics, Kobe University

No 1418, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: We empirically examine the relationship between capital accumulation and vintage as well as the productivity of industries in Japan from 1980 to 2007. Based on the empirical analyses, we confirmed that vintage exerted a significant influence on the productivity during the period of economic expansion, particularly during the economic upturn that started in 2000, where strong vintage effects were observed in all industries. The rejuvenation of capital equipment during this period clearly resulted from a strong productivity effect. In contrast, during the bubble period of the late 1980s, vintage exerted no observable effects on productivity despite significant increases in investment. This finding shows that increase of capital stock during this period was not necessarily Productive and was likely to produce a merely temporary boom. From this view, we reconfirm that the relationship between vintage and productivity changed in subtle ways in response to the phases of business cycles.

Keywords: Vintage; productivity; Business cycle (search for similar items in EconPapers)
JEL-codes: F32 F41 (search for similar items in EconPapers)
Pages: 34pages
Date: 2014-05
New Economics Papers: this item is included in nep-eff and nep-gro
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Citations: View citations in EconPapers (2)

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