Technological development in Japan: Inventive activities, science, R&D, and productivity

This dissertation examines (1) the development of inventive activities in Japan before W.W.II, (2) the relationship between academic research input and output of six industrialized nations including Japan after W.W.II, and (3) industrial R&D, inventive activities, and productivity of Japanese industries after W.W.II, Chapter 2 briefly reviews the development of the patent system and inventive activities in Japan before W.W.II. Japan voluntarily enacted the Patent Law and established a fairly solid patent system; inventive activities became widespread. Chapter 3 reexamines Schmookler's demand pull hypothesis and then investigates which socio-economic factors determined the development of inventive activities in Japan before W.W.II. The chapter points out that Schmookler failed to discuss the role of the supply side of goods. It argues that the supply side has an important role in shaping inventive activities, and it finds Japanese prewar data support this claim. Next, by estimating an aggregate patent production function, the chapter finds that human capital and foreign technology significantly contributed to inventive activities. Chapter 4 estimates an academic research production function with international data, including Japan, for the 1980's. The chapter finds, first, that Japan spent only one-half of the spending of other nations in terms of funding per capita or funding per GDP. Under these financial constraints, however, Japanese academic researchers still produced a respectable amount of research output. Second, the estimates of the research production function point to constant returns to scale. Third, the citation data show a consistent, strong downward flow of knowledge from basic sciences to applied sciences. Thus, basic sciences have a positive externality that facilitates research activities in more applied, downstream sciences. Chapter 5 estimates a patent production function and the rates of return to R&D of Japanese industry after W.W.II. The chapter found that both domestic R&D and foreign technology made important contributions to inventive activities. In the estimation of the rates of return to R&D, the chapter found that (1) foreign technology and domestic R&D worked together, and foreign technology boosted the returns to domestic R&D considerably; (2) the social rates of return to R&D is larger than the private rates of return to R&D.