No.32 March 2018
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ISSN 0911-1247 (NO.32) March 2018 Special Issue 1 Editor’s Introduction Akiko Tamura 1 The Innovation Mechanism in Target Costing Nobumasa Shimizu 3 Firms’ Investment Strategies and the Choice of Foreign Direct Investment Akiko Tamura 13 Impact of Foreign Direct Investment and Financial Market Development on Economic Growth Tomoko Hino 25 Special Issue 2 Editor’s Note Alternative Perspectives for Global History of Coffee and Tea Miki Sugiura 39 Coffee as a Global Beverage before 1700 Keiko Ota 43 Tea Drinking Culture in Russia Takako Morinaga 57 Coffee Production in the Asia-Pacific Region: The Establishment of a Japanese Diasporic Network in the Early 20th Century Mariko Iijima 75 Domesticating the Foreign: Re-making Coffee in Taiwan Sumei Wang, Ph.D. 89 Mapping Chinese Coffee Culture in the Land of Tea. The Case of Yunnan Province Ching Lin Pang & Mo Li 103 Maids in Akihabara: Fantasy, Consumption and Role-playing in Tokyo. Erica Baffelli & Keiko Yamaki 117 Regular Articles Exclusion of Nias Squatters and Expansion of Oil Palm Plantation Narihisa Nakashima 139 THE INSTITUTE OF COMPARATIVE ECONOMIC STUDIES HOSEI UNIVERSITY Tokyo, Japan JOURNAL OF INTERNATIONAL ECONOMIC STUDIES Editorial Board Akio Kondo (Editor in Chief) Junya Hamaaki Kazumasa Oguro Hideki Esho Fumio Makino Advisory Board Takao Sasaki (Professor Emeritus, Hosei University) Konosuke Odaka (Professor Emeritus, Hosei University, Professor Emeritus, Hitotsubashi University) Bishwanath Goldar (Professor, Institute of Economic Growth, University of Delhi) Jinping Yu (Professor, School of Economics, Nanjing University) Jongsoo Park (Professor, Department of Economics, Gyeongsang National University) Editorial Secretary Nanako Shirasaka Naoko Nakamura Naomi Takahashi この用紙は再生紙を利用しています。 (NO.32) March 2018 THE INSTITUTE OF COMPARATIVE ECONOMIC STUDIES HOSEI UNIVERSITY Tokyo, Japan Copyright 2018, by the Institute of Comparative Economic Studies, Hosei University Printed by the Sagamiprint Co., Ltd., Kanagawa, Japan Journal of International Economic Studies (2018), No.32, 1 ©2018 The Institute of Comparative Economic Studies, Hosei University Editor’s Introduction Akiko Tamura The study entitled “Firm’s Competitiveness and Foreign Direct Investment Strategy”, an Institute of Comparative Economic Studies (ICES) project, commenced in 2013. Its aim is to investigate how firms improve their competitiveness through investment abroad or international trade, and how firm competitiveness results in international competitiveness for the country. This issue is a key research question in the field of international trade, which is the editor’s main field of study. The project aims to illuminate new aspects of this issue through interdisciplinary research. The other project members’ specializations include microeconomics (contract theory), management accounting, corporate finance, international finance, and macroeconomics. This interdisciplinary collaboration has successfully stimulated our research resulting in the publication of 11 papers in March 2017. For this special issue of the journal, three project members contributed papers from the fields of management accounting, international trade, and macroeconomics. In “The Innovation Mechanism in Target Costing”, Nobumasa Shimizu examines the role of target cost information in the development and design of new products and knowledge creation activities from the perspective of the theory of management accounting. Needless to say, knowledge creation is the source of firm competitiveness. The paper highlights a gap between the popular theory of target costing and actual practices in Japan, and suggests a new theory. Shimizu’s study clarifies that target cost information that suppresses knowledge creation exists. Whether the target cost constitutes information that promotes or suppresses knowledge creation is determined by the extent to which the participants’ knowledge fluctuates in the product planning stage before the target cost is indicated, and the size of the gap between the target cost and drifting cost. In “Firm’s Investment Strategy and the Choice of Foreign Direct Investment”, Akiko Tamura examines the firm choice regarding foreign direct investment (FDI) using the theoretical framework of Antràs and Helpman [2004]. The novelty of this paper is that it considers the Miles and Snow strategic firm types as representing firm heterogeneity. Based on analyses of a mail survey of Japanese manufacturing firms, I find that, of the Miles and Snow strategic types, prospectors are more headquarter-intensive than defenders, and that analyzers fall in-between. From the mail survey of Shimizu and Ando [2011], it was found that prospectors perform FDI more aggressively than do defenders, which is consistent with my theoretical analysis. In future research, how firms’ FDI strategies influence their competitiveness will be investigated. In “Impact of Foreign Direct Investment and Financial Market Development on Economic Growth”, Tomoko Hino examines the impact of FDI and financial market development on economic growth in host countries by conducting analyses using ordinary least squares, a fixed effects model, and an instrumental variables regression on panel data collected for 60 countries from 1980 to 2014. The results of the analyses show that FDI and financial market development have independent positive effects on economic growth in host countries. This paper adds to confirming that the adoption of appropriate FDI strategies by firms results in improvements to the international competitiveness of the country. 1 (Editor’s Introduction) 2 Journal of International Economic Studies (2018), No.32, 3‒12 ©2018 The Institute of Comparative Economic Studies, Hosei University The Innovation Mechanism in Target Costing Nobumasa Shimizu Waseda University Abstract Target costing research studies the series of activities that handle cost management at the development and design stages of new products. The knowledge creation activities of each participant are positioned as essential elements in the target costing activities that create the cost in the new product development and design stages. Based on introspective conduct, the essence of knowledge creation is found in new knowledge creation activities triggered by psychological phenomena such as the blurring of concepts and knowledge fluctuation. The potential for generating new creative knowledge are triggered when given information that cannot be processed with the existing knowledge system. Target cost constitutes such information under some conditions. Information that suppresses knowledge creation exists. With such information, there is little knowledge fluctuation and low potential for generating original knowledge. Whether target cost constitutes information that promotes or suppresses knowledge creation is determined by the extent of participants’ knowledge fluctuation in the product planning stage before the target cost is indicated, and the size of the gap between target cost and drifting cost. Keywords: Target costing, Knowledge creation, Knowledge fluctuation, Information that facilitates knowledge creation, Information that suppresses knowledge creation JEL classification: O32, M49 1. The Issue As is widely known, target costing research studies the series of activities that handle cost management at the development and design stages of new products. Generally speaking, the research on target costing is advanced in the field of engineering, specifically, in industrial engineering associated with value engineering (VE). The research on target costing as a form of management accounting is lagging behind. However, the publication of noteworthy case studies and questionnaires suggests that there is a rising awareness of the importance of target costing research in the field of management accounting 1. On the whole, such survey studies shed light on the realities of target costing research, providing reasonable pointers for understanding its characteristics. The results of the field studies also suggest that there is a need to reexamine the conventional theoretical research on target costing, and to 1 For case studies, see Kondo (1989), Tanaka and Kobayashi (1990). For questionnaire survey results, see Tani et al.(1994), Tanaka (1995), Japan Accounting Association (1996). 3 The Innovation Mechanism in Target Costing construct new theories. It is time to consider the gap between popular theories and the reality of the process of setting target costs in target costing. Expected selling price –Target profit margin = Allowable cost ↓ Target cost ↑ Drifting cost Figure. 1 Setting target cost with the subtraction method According to popular theory, it is advisable to use the formula in Fig. 1 when setting target cost. Tanaka (1995) refers to this as the subtraction method 2 3. The process of using the subtraction method to set target cost is often explained as follows. First, the expected selling price is set based on a market evaluation of the new product design and functions. Then, the company computes the allowable cost by subtracting from the selling price the target profit margin necessary for its survival. The allowable cost is the cost premised on market conditions, which the company must achieve by any means possible to survive in a competitive market. However, participants in the development and design of the new product will feel demoralized if, despite every effort, they are unable to achieve the allowable cost. Therefore, the drifting cost, which is the estimated cost of manufacturing