The effect of international specialization on labor productivity : the case of Japanese electrical machinery

Abstract

Main purpose of this thesis is tofind a linkage between international specialization and labor productivity in electrical machinery industry of Japan using quantitative analyses.After exploring data from 1990 to 2010,trade specialization index shows that Japan is competitive in the trade of parts and components to East Asia countries. Moreover,parts and components are analyzed separately from final goods when we classify trades into 3 patterns in HS85 (6digits level).Those patternsare one-way-trade (OWT),vertical intra-industry trade (VIIT), and Horizontal intra- industry trade (HIIT). VIIT has been increased whereas OWT has decreasedin the case of parts and components.For the case offinal goods, VIIT has increased and OWT has still remained at high level, which means that East Asia countries export themto Japanmore than before. Moreover,outsourcing ratio has shown upward trend during the period, which means that Japan has relies more on parts and components from East Asia.In regression model, we have used outsourcing ratioand VIIT ratio as the indices of international specialization which may influence on labor productivity. The results show that outsourcing ratiohas positive influence on labor productivity, although the VIIT coefficient does not statistically significant.