Modeling the Volatility of Real GDP Growth: The Case of Japan Revisited

Previous studies (e.g., Hamori, 2000; Ho and Tsui, 2003; Fountas et al., 2004) find high volatility persistence of economic growth rates using generalized autoregressive conditional heteroskedasticity (GARCH) specifications. This paper reexamines the Japanese case, using the same approach and showing that this finding of high volatility persistence reflects the Great Moderation, which features a sharp decline in the variance as well as two falls in the mean of the growth rates identified by Bai and Perronâs (1998, 2003) multiple structural change test. Our empirical results provide new evidence. First, excess kurtosis drops substantially or disappears in the GARCH or exponential GARCH model that corrects for an additive outlier. Second, using the outlier-corrected data, the integrated GARCH effect or high volatility persistence remains in the specification once we introduce intercept-shift dummies into the mean equation. Third, the time-varying variance falls sharply, only when we incorporate the break in the variance equation. Fourth, the ARCH in mean model finds no effects of our more correct measure of output volatility on output growth or of output growth on its volatility.

Causality Relationships between Total Exports with Agricultural and Manufacturing GDP in Tanzania

This paper, investigates causal relationships among agriculture, manufacturing and export in Tanzania by using time series data for the period between 1970 and 2005. The empirical results show in both sectors there is Granger causality where agriculture causes both exports and manufacturing. Exports also cause both agricultural GDP and manufacturing GDP and any two variables out of three jointly cause the third one. There is also some evidence that manufacturing does not cause export and agriculture. Regarding cointegration, pairwise agricultural GDP and export are cointegrated, export and manufacture are cointegrated. Agriculture and manufacture are cointegrated but they are lag sensitive. However, three variables, manufacturing, export and agriculture both together are cointegrated showing that they share long run relation and this has important economic implications.

Trade Coefficients and the Role of Elasticity in a Spatial CGE Model Based on the Armington Assumption

The Armington Assumption in the context of multi-regional CGE models is commonly interpreted as follows: Same commodities with different origins are imperfect substitutes for each other. In this paper, a static spatial CGE model that is compatible with this assumption and explicitly considers the transport sector and regional price differentials is formulated. Trade coefficients, which are derived endogenously from the optimization behaviors of firms and households, are shown to take the form of a potential function. To investigate how the elasticity of substitutions affects equilibrium solutions, a simpler version of the model that incorporates three regions and two sectors (besides the transport sector) is introduced. Results indicate: (1) if commodities produced in different regions are perfect substitutes, regional economies will be either autarkic or completely symmetric and (2) if they are imperfect substitutes, the impact of elasticity on the price equilibrium system as well as trade coefficients will be nonlinear and sometimes very sensitive.

Chapter 8 Location Choice of Japanese Multinationals: Country Characteristics or Region Characteristics?

In the present global era in which firms choose the location of their plants beyond national borders, location characteristics are important for attracting multinational enterprises (MNEs). The better access to countries with large market is clearly attractive for MNEs. For example, special treatments on tariffs such as the Generalized System of Preferences (GSP) are beneficial for MNEs whose home country does not have such treatments. Not only such country characteristics but also region characteristics (i.e. province-level or city-level ones) matter, particularly in the case that location characteristics differ widely between a nation's regions. The existence of industrial concentration, that is, agglomeration, is a typical regional characteristic. It is with consideration of these country-level and region-level characteristics that MNEs decide their location abroad. A large number of academic studies have investigated in what kinds of countries MNEs locate, i.e. location choice analysis. Employing the usual new economic geography model (i.e. constant elasticity of substitution (CES) utility function, Dixit-Stiglitz monopolistic competition, and ice-berg trade costs), the literature derives the profit function, of which coefficients are estimated using maximum likelihood procedures. Recent studies are as follows: Head, Rise, and Swenson (1999) for Japanese MNEs in the US; Belderbos and Carree (2002) for Japanese MNEs in China; Head and Mayer (2004) for Japanese MNEs in Europe; Disdier and Mayer (2004) for French MNEs in Europe; Castellani and Zanfei (2004) for large MNEs worldwide; Mayer, Mejean, and Nefussi (2007) for French MNEs worldwide; Crozet, Mayer, and Mucchielli (2004) for MNEs in France; and Basile, Castellani, and Zanfei (2008) for MNEs in Europe. At the present time, three main topics can be found in this literature. The first introduces various location elements as independent variables. The above-mentioned new economic geography model usually yields the profit function, which is a function of market size, productive factor prices, price of intermediate goods, and trade costs. As a proxy for the price of intermediate goods, the measure of agglomeration is often used, particularly the number of manufacturing firms. Some studies employ more disaggregated numbers of manufacturing firms, such as the number of manufacturing firms with the same nationality as the firms choosing the location (e.g., Head et al., 1999; Crozet et al., 2004) or the number of firms belonging to the same firm group (e.g., Belderbos and Carree, 2002). As part of trade costs, some investment climate measures have been examined: free trade zones in the US (Head et al., 1999), special economic zones and opening coastal cities in China (Belderbos and Carree, 2002), and Objective 1 structural funds and cohesion funds in Europe (Basile et al., 2008). Second, the validity of proxy variables for location elements is further examined. Head and Mayer (2004) examine the validity of market potential on location choice. They propose the use of two measures: the Harris market potential index (Harris, 1954) and the Krugman-type index used in Redding and Venables (2004). The Harris-type index is simply the sum of distance-weighted real GDP. They employ the Krugman-type market potential index, which is directly derived from the new economic geography model, as it takes into account the extent of competition (i.e. price index) and is constructed using estimators of importing country dummy variables in the well-known gravity equation, as in Redding and Venables (2004). They find that "theory does not pay", in the sense that the Harris market potential outperforms Krugman's market potential in both the magnitude of its coefficient and the fit of the model to be estimated. The third topic explores the substitution of location by examining inclusive values in the nested-logit model. For example, using firm-level data on French investments both in France and abroad over the 1992-2002 period, Mayer et al. (2007) investigate the determinants of location choice and assess empirically whether the domestic economy has been losing attractiveness over the recent period or not. The estimated coefficient for inclusive value is strongly significant and near unity, indicating that the national economy is not different from the rest of the world in terms of substitution patterns. Similarly, Disdier and Mayer (2004) investigate whether French MNEs consider Western and Eastern Europe as two distinct groups of potential host countries by examining the coefficient for the inclusive value in nested-logit estimation. They confirm the relevance of an East-West structure in the country location decision and furthermore show that this relevance decreases over time. The purpose of this paper is to investigate the location choice of Japanese MNEs in Thailand, Cambodia, Laos, Myanmar, and Vietnam, and is closely related to the third topic mentioned above. By examining region-level location choice with the nested-logit model, I investigate the relative importance of not only country characteristics but also region characteristics. Such investigation is invaluable particularly in the case of location choice in those five countries: industrialization remains immature in those countries which have not yet succeeded in attracting enough MNEs, and as a result, it is expected that there are not yet crucial regional variations for MNEs within such a nation, meaning the country characteristics are still relatively important to attract MNEs. To illustrate, in the case of Cambodia and Laos, one of the crucial elements for Japanese MNEs would be that LDC preferential tariff schemes are available for exports from Cambodia and Laos. On the other hand, in the case of Thailand and Vietnam, which have accepted a relatively large number of MNEs and thus raised the extent of regional inequality, regional characteristics such as the existence of agglomeration would become important elements in location choice. Our sample countries seem, therefore, to offer rich variations for analyzing the relative importance between country characteristics and region characteristics. Our empirical strategy has a further advantage. As in the third topic in the location choice literature, the use of the nested-logit model enables us to examine substitution patterns between country-based and region-based location decisions by MNEs in the concerned countries. For example, it is possible to investigate empirically whether Japanese multinational firms consider Thailand/Vietnam and the other three countries as two distinct groups of potential host countries, by examining the inclusive value parameters in nested-logit estimation. In particular, our sample countries all experienced dramatic changes in, for example, economic growth or trade costs reduction during the sample period. Thus, we will find the dramatic dynamics of such substitution patterns. Our rigorous analysis of the relative importance between country characteristics and region characteristics is invaluable from the viewpoint of policy implications. First, while the former characteristics should be improved mainly by central government in each country, there is sometimes room for the improvement of the latter characteristics by even local governments or smaller institutions such as private agencies. Consequently, it becomes important for these smaller institutions to know just how crucial the improvement of region characteristics is for attracting foreign companies. Second, as economies grow, country characteristics become similar among countries. For example, the LCD preferential tariff schemes are available only when a country is less developed. Therefore, it is important particularly for the least developed countries to know what kinds of regional characteristics become important following economic growth; in other words, after their country characteristics become similar to those of the more developed countries. I also incorporate one important characteristic of MNEs, namely, productivity. The well-known Helpman-Melitz-Yeaple model indicates that only firms with higher productivity can afford overseas entry (Helpman et al., 2004). Beyond this argument, there may be some differences in MNEs' productivity among our sample countries and regions. Such differences are important from the viewpoint of "spillover effects" from MNEs, which are one of the most important results for host countries in accepting their entry. The spillover effects are that the presence of inward foreign direct investment (FDI) aises domestic firms' productivity through various channels such as imitation. Such positive effects might be larger in areas with more productive MNEs. Therefore, it becomes important for host countries to know how much productive firms are likely to invest in them. The rest of this paper is organized as follows. Section 2 takes a brief look at the worldwide distribution of Japanese overseas affiliates. Section 3 provides an empirical model to examine their location choice, and lastly, we discuss future works to estimate our model.

Evaluation of the mechanical properties of self compacting concrete using current estimating models. Estimating the modulus of elasticity, tensile strength, and modulus of rupture of self compacting concrete

This study includes an analysis of the applicability of current models used for estimating the mechanical properties of conventional concrete to self-compacting concrete. The mechanical properties evaluated are: modulus of elasticity, tensile strength, and modulus of rupture. An extensive database which included the dosifications and the mechanical properties of 627 mixtures from 138 different references, was used. The models considered are: ACI, EC-2, NZS 3101:2006 (New Zealand code) and the CSA A23.3-04 (Canadian code). The precision in estimating the modulus of elasticity and tensile strength is acceptable for all models; however, all models are less precise in estimating the modulus of rupture.

Mechanical actuator for biomimetic propulsion and the effect of the caudal fin elasticity on the swimming performance

This paper presents a mechanical actuator for the biomimetic propulsion of swimming devices and the experimental study of the effect of the caudal fin elasticity on the overall performance. The design of the proposed drive allows the DC motor to operate at constant speed, so all the power of the motor is spent only for the motion of the caudal fin. A prototype of the actuator, in which the caudal fin serves as a driving element, is manufactured and tested in both laboratory and natural conditions. The swimming speed, the thrust efficiency and the maneuverability are evaluated for caudal fins with different stiffness. The caudal fin whose rigidity varies relative to both vertical and horizontal cross-section, exhibits the best performance. The achieved results also confirm that the proposed actuator could be of great interest to applications in the field of underwater operation, ocean investigation and environmental protection.

Boundary elements in potential and elasticity theory

A general theory that describes the B.I.E. linear approximation in potential and elasticity problems, is developed. A method to tread the Dirichlet condition in sharp vertex is presented. Though the study is developed for linear elements, its extension to higher order interpolation is straightforward. A new direct assembling procedure of the global of equations to be solved, is finally showed.

Quality grading of cork stoppers based on porosity, density and elasticity.

An objective control method for grading cork stoppers is presented using a cork stopper quality index based on porosity, density and elasticity, these being the properties which have the greatest influence on the closure capacity of the stopper. The elasticity of the cork stopper is measured through the relaxation ratio, which is defined by the relationship between the relaxation force exerted by the cork in the bottleneck and the compressive force exerted by a caliper to fit the stopper in the bottle. The relaxation ratio, defined in this way, represents the part of the compression force which is applied to the stopper on insertion and which is recovered in the form of the relaxation force to achieve closure. The calculation of the relaxation ratio involves the measurement of the relaxation force of the fitted stopper. This force has been measured rigorously and precisely using a device developed in the Cork Laboratory at the INIA-CIFOR and which is presented for the first time in this paper.

The p-Adaptive Biem Approach for Two-Dimensional Elasticity Analysis

This paper presents the development and application of the p-adaptive BIEM version in elastostatics. The basic concepts underlying the p-adaptive technique are summarized and discussed. Some Pascal pseudocodes which show the way how such a technique can be implemented easily in microcomputers are also provided. Both the applicability and the accuracy of the method proposed here are illustrated through a numerical example.

Optimal boundary geometry in an elasticity problem: a systematic adjoint approach

In different problems of Elasticity the definition of the optimal gcometry of the boundary, according to a given objective function, is an issue of great interest. Finding the shape of a hole in the middle of a plate subjected to an arbitrary loading such that the stresses along the hole minimizes some functional or the optimal middle curved concrete vault for a tunnel along which a uniform minimum compression are two typical examples. In these two examples the objective functional depends on the geometry of the boundary that can be either a curve (in case of 2D problems) or a surface boundary (in 3D problems). Typically, optimization is achieved by means of an iterative process which requires the computation of gradients of the objective function with respect to design variables. Gradients can by computed in a variety of ways, although adjoint methods either continuous or discrete ones are the more efficient ones when they are applied in different technical branches. In this paper the adjoint continuous method is introduced in a systematic way to this type of problems and an illustrative simple example, namely the finding of an optimal shape tunnel vault immersed in a linearly elastic terrain, is presented.

Evolution over time of heavy vehicle volume in toll roads: A dynamic panel data to identify key explanatory variables in Spain

Improving the knowledge of demand evolution over time is a key aspect in the evaluation of transport policies and in forecasting future investment needs. It becomes even more critical for the case of toll roads, which in recent decades has become an increasingly common device to fund road projects. However, literature regarding demand elasticity estimates in toll roads is sparse and leaves some important aspects to be analyzed in greater detail. In particular, previous research on traffic analysis does not often disaggregate heavy vehicle demand from the total volume, so that the specific behavioral patternsof this traffic segment are not taken into account. Furthermore, GDP is the main socioeconomic variable most commonly chosen to explain road freight traffic growth over time. This paper seeks to determine the variables that better explain the evolution of heavy vehicle demand in toll roads over time. To that end, we present a dynamic panel data methodology aimed at identifying the key socioeconomic variables that explain the behavior of road freight traffic throughout the years. The results show that, despite the usual practice, GDP may not constitute a suitable explanatory variable for heavy vehicle demand. Rather, considering only the GDP of those sectors with a high impact on transport demand, such as construction or industry, leads to more consistent results. The methodology is applied to Spanish toll roads for the 1990?2011 period. This is an interesting case in the international context, as road freight demand has experienced an even greater reduction in Spain than elsewhere, since the beginning of the economic crisis in 2008.

Explaining light vehicle demand evolution in interurban toll roads: a dynamic panel data analysis in Spain

Tolls have increasingly become a common mechanism to fund road projects in recent decades. Therefore, improving knowledge of demand behavior constitutes a key aspect for stakeholders dealing with the management of toll roads. However, the literature concerning demand elasticity estimates for interurban toll roads is still limited due to their relatively scarce number in the international context. Furthermore, existing research has left some aspects to be investigated, among others, the choice of GDP as the most common socioeconomic variable to explain traffic growth over time. This paper intends to determine the variables that better explain the evolution of light vehicle demand in toll roads throughout the years. To that end, we establish a dynamic panel data methodology aimed at identifying the key socioeconomic variables explaining changes in light vehicle demand over time. The results show that, despite some usefulness, GDP does not constitute the most appropriate explanatory variable, while other parameters such as employment or GDP per capita lead to more stable and consistent results. The methodology is applied to Spanish toll roads for the 1990?2011 period, which constitutes a very interesting case on variations in toll road use, as road demand has experienced a significant decrease since the beginning of the economic crisis in 2008.

Genetic evidence for the role of GDP-mannose in plant ascorbic acid (vitamin C) biosynthesis

Vitamin C (l-ascorbic acid; AsA) acts as a potent antioxidant and cellular reductant in plants and animals. AsA has long been known to have many critical physiological roles in plants, yet its biosynthesis is only currently being defined. A pathway for AsA biosynthesis that features GDP-mannose and l-galactose has recently been proposed for plants. We have isolated a collection of AsA-deficient mutants of Arabidopsis thaliana that are valuable tools for testing of an AsA biosynthetic pathway. The best-characterized of these mutants (vtc1) contains ≈25% of wild-type AsA and is defective in AsA biosynthesis. By using a combination of biochemical, molecular, and genetic techniques, we have demonstrated that the VTC1 locus encodes a GDP-mannose pyrophosphorylase (mannose-1-P guanyltransferase). This enzyme provides GDP-mannose, which is used for cell wall carbohydrate biosynthesis and protein glycosylation as well as for AsA biosynthesis. In addition to genetically defining the first locus involved in AsA biosynthesis, this work highlights the power of using traditional mutagenesis techniques coupled with the Arabidopsis Genome Initiative to rapidly clone physiologically important genes.

The degree of nonlinearity and anisotropy of blood vessel elasticity

Blood vessel elasticity is important to physiology and clinical problems involving surgery, angioplasty, tissue remodeling, and tissue engineering. Nonlinearity in blood vessel elasticity in vivo is important to the formation of solitons in arterial pulse waves. It is well known that the stress–strain relationship of the blood vessel is nonlinear in general, but a controversy exists on how nonlinear it is in the physiological range. Another controversy is whether the vessel wall is biaxially isotropic. New data on canine aorta were obtained from a biaxial testing machine over a large range of finite strains referred to the zero-stress state. A new pseudo strain energy function is used to examine these questions critically. The stress–strain relationship derived from this function represents the sum of a linear stress–strain relationship and a definitely nonlinear relationship. This relationship fits the experimental data very well. With this strain energy function, we can define a parameter called the degree of nonlinearity, which represents the fraction of the nonlinear strain energy in the total strain energy per unit volume. We found that for the canine aorta, the degree of nonlinearity varies from 5% to 30%, depending on the magnitude of the strains in the physiological range. In the case of canine pulmonary artery in the arch region, Debes and Fung [Debes, J. C. & Fung, Y. C.(1995) Am. J. Physiol. 269, H433–H442] have shown that the linear regime of the stress–strain relationship extends from the zero-stress state to the homeostatic state and beyond. Both vessels, however, are anisotropic in both the linear and nonlinear regimes.

Torsional directed walks, entropic elasticity, and DNA twist stiffness

DNA and other biopolymers differ from classical polymers because of their torsional stiffness. This property changes the statistical character of their conformations under tension from a classical random walk to a problem we call the “torsional directed walk.” Motivated by a recent experiment on single lambda-DNA molecules [Strick, T. R., Allemand, J.-F., Bensimon, D., Bensimon, A. & Croquette, V. (1996) Science 271, 1835–1837], we formulate the torsional directed walk problem and solve it analytically in the appropriate force regime. Our technique affords a direct physical determination of the microscopic twist stiffness C and twist-stretch coupling D relevant for DNA functionality. The theory quantitatively fits existing experimental data for relative extension as a function of overtwist over a wide range of applied force; fitting to the experimental data yields the numerical values C = 120 nm and D = 50 nm. Future experiments will refine these values. We also predict that the phenomenon of reduction of effective twist stiffness by bend fluctuations should be testable in future single-molecule experiments, and we give its analytic form.