Japan experienced high growth of TFP following World War II. This paper
studies the sources of this technological growth and documents the role played
by different government policies in achieving such growth. We find that in nonagricultural
sectors, TFP growth occurred at first through the import of foreign
technologies via licensing, and subsequently through the innovation of its own
technologies. In agriculture, TFP grew mostly through the development of its
own technologies. The Japanese government played a part in the growth of TFP
by directing the adoption of foreign technologies, promoting coordination of
R&D activities, and setting up channels for the domestic diffusion of available
technologies.
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