{
  "title": "Japan: Selected Issues",
  "publication": "IMF Staff Country Reports, March 30, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2023/03/30/japan-selected-issues-531590",
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  "summary": "This Selected Issues paper proposes two new drivers of corporate cash holdings and tests them using firm-level data in Japan. In Japan, private savings have shifted from households to the corporate sector. The first driver is the rising share of intangible capital.",
  "sections": [
    {
      "heading": "Executive summary and key findings",
      "content": "- The paper proposes two new drivers of corporate cash holdings and tests them using firm-level data in Japan.\n- Private savings have shifted from households to the corporate sector.\n- Driver 1: rising share of intangible capital contributes to higher corporate cash holdings.\n- Driver 2: declining corporate tax rates contribute to higher corporate cash holdings.\n- Empirical results confirm that more intangible capital and lower corporate tax rates contribute to corporate cash holdings, with the tax cuts more relevant for public firms."
    },
    {
      "heading": "Quantitative magnitudes (empirical results)",
      "content": "- Rising intangible capital in Japan can explain about a quarter of the increase of cash holdings among public firms.\n- Rising intangible capital in Japan can explain about 30 percent of the increase of cash holdings among private firms.\n- Decreasing corporate tax rates can explain about 4 percent of the increase in cash holdings among public firms.\n- The effect of tax cuts is much weaker among private firms due to various subsidies and exemptions for subject matter experts."
    },
    {
      "heading": "Thematic coverage and keywords",
      "content": "- Subjects: Carbon tax, Financial services, Gender, Income, International organization, Labor, Monetary policy, National accounts, Taxes, Wages, Women, Yield curve\n- Keywords: B. emission trend, Carbon tax, Global, Income, JGB yield curve, policy implication, STEM field, STEM worker, Wages, Women, Yield curve\n\nInternational Monetary Fund. Japan: Selected Issues. IMF Staff Country Reports 2023, 128 (2023). DOI: https://doi.org/10.5089/9798400237409.002\n\n---\n\n Content in this bundle\n\n- Japan: Selected Issues; IMF Country Report No. 23/128; March 7, 2023\n  - Japan: Selected Issues; IMF Country Report No. 23/128; March 7, 2023 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Japan: Selected Issues; IMF Country Report No. 23/128; March 7, 2023 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: March 30, 2023",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400237409.002",
    "The paper proposes two new drivers of corporate cash holdings and tests them using firm-level data in Japan.",
    "Private savings have shifted from households to the corporate sector.",
    "Driver 1: rising share of intangible capital contributes to higher corporate cash holdings.",
    "Driver 2: declining corporate tax rates contribute to higher corporate cash holdings.",
    "Empirical results confirm that more intangible capital and lower corporate tax rates contribute to corporate cash holdings, with the tax cuts more relevant for public firms.",
    "Rising intangible capital in Japan can explain about a quarter of the increase of cash holdings among public firms.",
    "Rising intangible capital in Japan can explain about 30 percent of the increase of cash holdings among private firms.",
    "Decreasing corporate tax rates can explain about 4 percent of the increase in cash holdings among public firms.",
    "The effect of tax cuts is much weaker among private firms due to various subsidies and exemptions for subject matter experts.",
    "Subjects: Carbon tax, Financial services, Gender, Income, International organization, Labor, Monetary policy, National accounts, Taxes, Wages, Women, Yield curve",
    "Keywords: B. emission trend, Carbon tax, Global, Income, JGB yield curve, policy implication, STEM field, STEM worker, Wages, Women, Yield curve",
    "**Japan: Selected Issues; IMF Country Report No. 23/128; March 7, 2023**"
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