This paper is examines the evolution of Japan’s capital markets and the related regulatory reforms after the Global Financial Crisis. We start by looking at the importance of capital markets in the Japanese financial system. We study how the size of financial flows through capital markets relative to those through the banking sector changed since the 1980s in Section 2. Then, in Section 3, we look at how Japan’s financial system responded to the Global Financial Crisis. We find that the disruption of the financial system in Japan was small. Section 4 then surveys the financial regulatory changes in Japan since the Global Financial Crisis. While the Japanese regulators tightened the regulation to improve the financial stability as the regulators in the U.S. and Europe did, they also continued the efforts to develop capital markets in Japan. The efforts continue and receive strong endorsement from Abenomics, which put an emphasis on economic structural reform to restore growth in Japan. We examine the capital market policies in Abenomics in Section 5. Section 6 concludes.
The fifteenth session of the Korea-U.S. West Coast Strategic Forum, held in Korea on November 17, 2015, convened senior South Korean and American policymakers, scholars and regional experts to discuss North Korea policy and recent developments on the Korean Peninsula. Hosted by the Korea Program at the Walter H. Shorenstein Asia-Pacific Research Center at Stanford University, the Forum is also supported by the Sejong Institute.
A conference that honored the life and scholarly contributions of Stanford economist Masahiko Aoki was held at Stanford. Dozens of friends, family and community members paid tribute to Aoki, the Henri and Tomoye Takahashi Professor of Japanese Studies and Professor of Economics, emeritus, who died in July at the age of 77.
Eleven renowned economists and social scientists gave talks on Aoki’s extensive fields of research in economic theory, institutional analysis, corporate governance, and the Japanese and Chinese economies at the Dec. 4 conference, which was followed by a memorial ceremony the next day.
“When we contacted people to speak at this conference, few people turned us down,” said Stanford professor Takeo Hoshi. “The reason for this is Masa. It shows how much Masa was respected and how much his work is valued.”
The events were hosted by the Japan Program at the Walter H. Shorenstein Asia-Pacific Research Center, the Freeman Spogli Institute for International Studies (FSI), Graduate School of Business, Department of Economics and the Stanford Institute for Economic Policy Research (SIEPR).
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Aoki came to Stanford in 1967 as an assistant professor, held faculty appointments at Kyoto University and Harvard, and returned to Stanford in 1984. He retired to emeritus status at Stanford in 2005.
Throughout the conference, Aoki was described as an astute professor and colleague, valuable mentor and loyal friend by the many speakers and participants who shared works, stories and multimedia featuring their interactions with Aoki.
Aoki pioneered the field of comparative institutional analysis (CIA) with a team of scholars at Stanford: Avner Greif, John Litwack, Paul Milgrom and Yingyi Qian, among others. CIA analyzes and compares different institutions that evolve to regulate different societies.
Masahiko Aoki (far left) is pictured with colleagues on the Stanford campus in the late 1960s.
“Masa had a good background in looking at the economy as a whole, financial institutions as a whole – not just how numbers or actors economically interact – but also the people who interact within a given institutional framework,” said Koichi Hamada, a professor emeritus at Yale University.
“Masa had a good background in looking at the economy as a whole, financial institutions as a whole – not just how numbers or actors economically interact…”
-Koichi Hamada, Yale University
Aoki applied a systematic lens to everything he studied, a “take society as a total entity” approach, Hamada said.
Aoki grew up in Japan, and developed a deep interest in Japanese politics at an early age. He was actively involved in student movements in the early 1960s, at the heart of which was a campaign against a controversial U.S.-Japan security treaty. China became another great interest of his as the country began to undergo economic transformation and modernization.
Throughout his career, Aoki traveled to Japan and China often, and sought to better inform policy debates by engaging scholars, government leaders and journalists there.
He believed in sharing lessons learned from his own scholarly analyses on what constitute institutions, particularly the “people” aspects – the employees, their cognitive abilities and levels of participation.
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Top left to right: Yingyi Qian of Tsinghau University talks with Avner Greif of Stanford University and Hugh Patrick of Columbia University. / Koichi Hamada of Yale University delivers his remarks titled "Masahiko Aoki: A Social Scientist." Bottom: Reiko Aoki, the wife of Masahiko Aoki, listens in to Kenneth Arrow, a professor emeritus at Stanford University. Credit: Rod Searcey
Aoki was not only a scholar of institutions but also a builder of them.
“Amid a time of diplomatic tensions between China and Japan…Masa was able to bring Japanese, Chinese and American economists together to study and do research,” said Yingyi Qian, dean and professor at the school of economics and management at Tsinghua.
At Stanford, Aoki played a leading role in the creation of the Stanford Japan Center and a multi-day conference that convened annually in Kyoto on issues of mutual concern between Asia-Pacific countries and the United States.
“Masa Aoki’s legacy will serve as an integral guidepost for many years to come. May his soul rest in peace.”
-Kotaro Suzumura, Hitotsubashi University
Earlier this year, Aoki was hospitalized for lung disease. Even at that stage, he worked tirelessly to revise a paper that examines the institutional development of China and Japan in the late 19th to early 20th centuries.
Aoki was also fondly remembered for his mentorship of students at Stanford and other universities he taught at.
“He was an original and unique professor – quite different from others that I’ve met in many respects. He was generous with his time, not hierarchical,” said Miguel Angel Garcia Cestona, who studied for a doctorate at Stanford and now teaches at the Universitat Autonoma de Barcelona.
Garcia Cestona, among other former students, spoke of Aoki as a friend and shared memories of their former professor hosting them at his home.
Stanford professor Takeo Hoshi opens a day-long conference at Stanford celebrating the life and scholarly work of Masahiko Aoki, Dec. 4, 2015. | Rod Searcey
Encina Hall E301616 Serra StreetStanford, CA94305-6055
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Anne Booth is the Lee Kong Chian NUS-Stanford Distinguished Fellow on Contemporary Southeast Asia at Shorenstein-APARC during October and November 2015. She was Professor of Economics (with reference to Asia) at the School of Oriental and African Studies, University of London from 1991 to 2013, and is now Professor Emeritus. Before moving to London, she held posts at the University of Singapore and the Australian National University.
She grew up in New Zealand, and graduated from Victoria University of Wellington, and the Australian National University in Canberra. Her main research interest is the modern economic history of Southeast Asia, and the impact of different colonial legacies on post-colonial development across East and Southeast Asia. Her book, Colonial Legacies: Economic and Social Development in East and Southeast Asia, was published by the University of Hawaii Press in 2007, and she has just completed a study of Indonesian economic development which will be published by Cambridge University Press next year.
She will use her time at Stanford to gather material for a study of changing living standards in Southeast Asia from the 19th century to the present.
2015-16 Lee Kong Chian NUS-Stanford Distinguished Fellow on Contemporary Southeast Asia
Stanford students worked together to pitch marketing ideas to a major Japanese airline at an event last Tuesday. The event, called an “ideathon,” is part of a series of events seeking to strengthen the U.S.-Japan relationship through exchange of ideas.
The ideathon was the first of its kind at the Shorenstein Asia-Pacific Research Center, led by the Japan Program under the rubric of the Stanford Silicon Valley-New Japan Project (SV-NJ). The project is supported in part by All Nippon Airways (ANA), the Japanese airline featured at the event.
Nineteen students participated, from both undergraduate and graduate levels and across disciplines – including students from the Graduate School of Business, and other majors including economics, mathematics, computer science, philosophy and East Asian studies.
Placed on a team with others they had just met, students were encouraged to assemble quickly and generate solutions to the challenge: how can ANA strengthen its brand awareness in the United States?
ANA is seeking to double in size in the next three years, yet it faces a few obstacles in this endeavor, including a customer base that is mostly in Japan and low brand visibility internationally, according to a senior employee that presented at the event.
“Who had heard of ANA before this event?” asked Hiroyuki Miyagawa, a marketing executive at ANA. Few hands raised in the audience.
Organized into four teams, each student team was joined by an ANA employee who listened in and offered guidance and a chance to learn from a longtime practitioner.
One and a half hours later, with Post-it notes and scribbled diagrams sprinkled across tables, each team emerged ready to present their 3-minute pitch to a panel of judges. The panel included executives from ANA, the World Innovation Lab (WiL), a venture capital firm in Palo Alto, and bTrax, a San Francisco based design firm.
Below are a few pictures from the event.
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Team Three acts out a skit. | They proposed that ANA establish lounges for the general public to gather in and purchase goods from Uniqlo and Muji, two Japanese lifestyle retailers. The lounges would offer a place to reinforce ANA's brand outside of the airport, they said.
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Team Four puts their heads together to generate ideas. | In their pitch, the team noted that baseball is a popular sport among Americans and Japanese. They recommended baseball be a focus of the marketing campaign, and said television and social media would best reach the target audience.
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Team Five explains their marketing approach. | Flying can lead to some unpleasant experiences, and a way ANA can set itself apart is to make those experiences manageable, and even enjoyable, they said. Their proposal was to bring new amenities to the in-flight experience such as a care package for people who sit in the middle seat.
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Team One poses for a picture after their presentation. | In their pitch, they recommended using ANA’s association with Japan to differentiate from other global airlines. Their approach included creating a film that features an American celebrity traveling on ANA.
The winning team was Team One whose concept was to use a celebrity figure – Ellen DeGeneres – in their advertising. They said that the target audience could relate to DeGeneres, and her already-established following would be an advantage.
The judges commended Team One for the creativity of their idea and its level of feasibility. Team One consisted of students Yaqian Fan, Michael Hong, Sam Ide, Lu Li and Adelbert Tan.
Kenji Kushida, a Stanford alumnus and project leader of SV-NJ, said:
“When I was a student, I craved for an opportunity to brainstorm solutions to real-world challenges and to do it in an environment that provided instant feedback,” he said, “We were able to make that happen here with the support of ANA and WiL, and are thrilled with the outcome."
The Korea Program at Stanford’s Walter H. Shorenstein Asia-Pacific Research Center is soliciting papers for the Koret Workshop on Globalization, Innovation and Culture in Korea at Stanford University.
South Korea has become an economic powerhouse, but faces multiple challenges. To maintain its dynamism and growth in the increasingly innovation-driven global knowledge economy, Korea needs to turn its attention to the more social, cultural and educational aspects of development.
Of paramount importance is the ability to welcome and embrace difference and creativity, upgrade pertinent social values of cultural diversity and social tolerance, promote innovation and effectively reflect and transmit such values through institutions. The conference will be interdisciplinary, problem-oriented and policy-relevant. A broad range of questions and approaches are welcomed, particularly those that address main challenges Korea will face going forward.
Possible research topics include:
• Higher education, cultural diversity and development.
• Social cohesion beyond nationalism and multiculturalism.
• Entrepreneurial culture and innovation.
• Causes and consequences of rising inequality.
• Demographic changes, skilled foreign labor and education/work culture.
The conference will be held on April 22, 2016 at Stanford University. Beyond research presentations, the conference also aims to foster connections among scholars with common interests. Travel (domestic or international economy class) and hotel costs as well as a modest honorarium will be covered for the presenters.
Papers may be submitted for consideration in a PDF file (6,000-8,000 words) to Yong Suk Lee by email at yongslee@stanford.edu. The submission deadline is Jan. 31, 2016.
The Koret Workshop is organized by the Korea Program to bring together an international panel of experts in Korean affairs. The Korea Program established the Koret Fellowship in 2008 with generous funding from the Koret Foundation.
Today, Korea is renowned for its remarkable economic growth and its globally-recognized companies that include Samsung, Hyundai and POSCO. Given that Korea was one of the world’s poorest countries a mere 50 years ago, many people call Korea’s rapid economic development “a miracle.” However, when Korea’s road to economic prosperity is analyzed, several key factors that led to this growth can be identified. Professor Moon will explain these fundamental factors and provide perspective on how Korea can sustain this growth going forward.
Hwy-Chang Moon is a visiting professor in the Korea Program for the 2015 academic year and is currently teaching a course on Korean economy and business through the Center for East Asian Studies at Stanford University. Moon is a professor at Seoul National University, where he also served as the Dean of Graduate School of International Studies. He has delivered special lectures at various institutions, and has consulted several multinational companies and governments (e.g., Malaysia, Dubai, Azerbaijan and the Guangdong Province of China).
Moon is the editor-in-chief of the Journal of International Business and Economy, andhas published numerous articles and books on topics covering international business strategy, cross-cultural management and Economic Development in East Asia with a focus on South Korea.
Moon received a PhD from the University of Washington, and has previously taught at the University of Washington, University of the Pacific, State University of New York at Stony Brook, Helsinki School of Economics, Keio University, and Hitotsubashi University.
Encina Hall E301616 Serra StreetStanford, CA 94305-6055
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Hwy-Chang Moon has joined the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) for the 2015-2016 academic year. During his time at Shorenstein APARC, he will be working on a research project entitled, “The Global Strategy of Korean Firms in Silicon Valley," and will also teach a course on Korean economy and business in the fall quarter.
Moon is a professor of international business strategy at the Graduate School of International Studies (GSIS), Seoul National University, where he also served as the dean of GSIS.
Professor Moon is the editor-in-chief of the Journal of International Business and Economy, andhas published numerous articles and books on topics covering international business strategy, cross-cultural management and economic development in East Asia with a focus on South Korea. He frequently provides his perspectives on global economy and business through interviews and televised debates, and his writings appear regularly in South Korean newspapers. The New York Times and NHK World TV have also asked for his perspectives on these topics.
Professor Moon received a PhD from the University of Washington, and has previously taught at the University of Washington, University of the Pacific, State University of New York at Stony Brook, Helsinki School of Economics, Keio University, and Hitotsubashi University. He has also consulted several multinational companies, international organizations, and governments (e.g., Malaysia, Dubai, Azerbaijan, and the Guangdong Province of China).
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