Community, Market and State in Development by Kaliappa Kalirajan, Keijiro Otsuka

By Kaliappa Kalirajan, Keijiro Otsuka

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Extra resources for Community, Market and State in Development

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They found that in the 1950s, technology adoption had a positive impact on labor productivity, value-added, the capital-labor ratio, and the R and D-sales ratio, although not on TFP. In a different study, Nakamura and Ohashi (2008) reveal that the adoption of BOF raised the annual TFP growth rate of the steel industry from 7 percent (counterfactual) to 17 percent (actual in 1957–68). At the same time, they find that just after a plant introduced BOF, its TFP dropped 9 percent and it took two years before TFP reached the level achieved by the old open-hearth technology.

The license share of these three industries over the total number of licenses was on average about 60 percent in the 1950s and 1960s. This large contribution of imported technologies to postwar Japanese economic development is widely accepted in the preceding studies. ” Goto and Odagiri (1996) point out that Japan efficiently utilized the channels of technology transfer such as import of machinery and equipment, and purchase of technology and technological services. 6 shows a scatter diagram showing the ratio of net payment for technology import to GDP and productivity growth by industry.

The reason behind this division is twofold. First, right after World War Two, the share of output and employment in the agricultural sector was more than 50 percent. As is shown in Esteban-Pretel and Sawada (2009), accounting for the structural change that took place in Japan in the postwar period is essential to understanding the rapid growth. During a structural change process, TFP growth, or more precisely, labor productivity growth in the agricultural sector, is an important determinant of economic growth.

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