Designing wartime economic control: Productivity and firm dynamics in the Japanese cotton spinning industry, 1937-1939

By the middle of the 1930s, Japan had included Kwantung state and Manchuria in the yen bloc; after the outbreak of the Second Sino–Japanese War, the yen bloc expanded to the northern part of China occupied by the Japanese army. [...] In determining the basic structure of the Material Mobilization Plan, the Planning Board anticipated the supply of each commodity and then allocated supplies between the army, the navy, the civil ministries, and the private sector. [...] The decline in the raw cotton imports and the imposition of the related government controls are reflected in the cotton yarn production from the first half of 1938. [...] Productivity implication of the controls In this section, we investigate the implications of the government controls for the productivity of the cotton industry. [...] Table 6 The estimation of the production function above does not capture the change in the weighted average productivity due to the change in the composition of production by firms.