Takamune Fujii (p)

Kenji Kondoh

In recent years, production network has been expanding across borders and regional integration has been deepening in East Asia. This new phenomenon of world economy is closely interacted with intra-regional trade and foreign investment. In the literature of “production fragmentation” (seminal Arndt and Kierzkowski 2001, and others), declining international transaction cost (so-called as "service-link cost") is one of the most important reasons for formulating international production network. Many kind of costs are involved in this service-link cost, such as communication cost, transportation cost, coordination cost, and so on. Then, one of the most important costs is the cost for business trips. Production processes are fragmented and scattered internationally, coordination cost among fragmented establishments is increased rapidly. Partly, this increased coordination cost may be offset by the evolution of information and communication technology, for instance, tele-conference system like Webex, and so on. However, there is some kind of problems to be solved by the face-to-face communication. Then, reduction of the cost of business trips will be important for production fragmentation. In this paper, we intend to analyze the relationship between international production network formulation and passenger air transportation cost reduction. We already have obvious evidence that transportation cost is declining dramatically because of the continuous effort to deregulation and increasing LCCs activities. Moreover, we also knew that global production network is expanding and deepening dramatically, especially in East Asia and Europe. Therefore, we will test this relationship empirically by using panel data of international production/trade information and passengers air transportation flow information, and clarify the importance of passengers transportation cost reduction for formulating international production network and deepening regional integration.

Eriko Hiraiwa (p)

Takamune Fujii

After the declaration in 1967 launching its establishment, the Association of Southeast Asian Nations (ASEAN) accelerated economic growth in the region through the liberalization of trade in goods and services. Concomitantly with trade liberalization, new research has focused on the mobility of laborers within ASEAN, which aims to liberalize their movement under the ASEAN Economic Community (AEC) established in 2015. Therefore, this paper aims to explore key questions in this context: What is currently known about the movement of labor and associated remittances in this region of the world? Additionally, what does this mean for Japan? Our examination shows that the diversity of intraregional and international migration has been rapidly increasing in terms of worker movements and associated remittances in this region. Moreover, although the impact on Japan is relatively small in absolute figures, Japan has become one of the destinations for workers from ASEAN in parallel with its extensive involvement in ASEAN trade.

Kenji Kondoh (p), Yuichi Furukawa , Shigemi Yabuuchi

Eriko Hiraiwa

We consider an open rural region of a developed country with two sectors: environmentally sensitive agricultural industry and locally operated tourism which generates pollution. We find that under certain reasonable conditions, introduction of additional capital or labor promoted by local government may harm the economic welfare of residents. In the case where the tourism is environmentally friendly, however, introducing outside labor occasionally benefits the welfare. On the other hand, increased tourists from outside may cause positive effects.