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This paper uses new Japanese panel data to estimate the impact of various human resource management practices (HRMP's) on productive efficiency.These include information sharing devices, such as joint labor-management committees(JLMC's) and non-union employee associations (NUEA's), and financial participation schemes, such as profit sharing plans(PSP's) and employee stock ownership plans (ESOP's).By merging data from a new survey concerning HRMP's among publicly-held Japanese firms with two other public data sources, we create for the first time a enterprise-level panel data set for Japanese firms that provides information annually for 1970-85 on both information sharing and financial participation.The data are then used to estimate translog production functions augmented by variables to capture the effects of information sharing and financial participation.The estimations yield the first econometric evidence on the productivity effects of diverse HRMP's in Japan.The key findings include: (i) there are significant productivity-enhancing effects for JLMC's, NUEA's, PSP's and ESOP's; (ii) these productivity gains will change as HRMP's age.For instance, the introduction of a JLMC boosts productivity initially by 9 percent annually.The productivity gains rise over time and reach their highest point (11 percent) 23 years after the introduction of the JLMC.After their highest point, the productivity gains gradually diminish and eventually call for the implementation of a new innovation in information sharing; (iii) there is a significant complementarity between information sharing and PSP's; and (iv) the favorable productivity effects of information sharing are reinforced by the presence of formal trade unions, pointing to a complementarity between information sharing and unions.information sharing devices.For financial participation, Freeman and Weitzman (1987) that use industry-level aggregate data to show the statistically significant positive correlations between bonuses and employment level.However, Brunello (1991) uses firm-level micro data, from which industry-level data are aggregated, to account for a number of potential biases inherent in the use of aggregate data, and finds no statistically significant positive correlations between bonuses and employment level for the electric machinery, car and steel industries.*Recently, Jones and Kato (1995) use firm-level panel data to find that the introduction of an ESOP will lead to a 4 to 5 percent increase in productivity; this productivity payoff does not appear immediately; and there is a modest productivity gain from the bonus system.For information sharing Morishima (1991 a; 1991 b) use firm-level micro data to find the statistically significant positive correlations between the extent of information sharing through Joint Labor Management Committees (JLMC's) and productivity, and the statistically significant correlations between stronger JLMC's and shorter and smoother wage negotiation.Nevertheless, no study has been able to consider both financial participation schemes and information sharing devices simultaneously.This weakness in the available empirical evidence is especially troublesome since several authors have recently developed hypotheses that some HRMP's may be more effective when used in combination with other HRMP's (see, for instance, Fitzroy and Kraft, 1987;Weitzman and Kruse, 1990;Levine and Tyson, 1990;Jones and Pliskin, 1991;Ben-Ner and Jones, 1992;Ichniowski, Shaw and Prennushi, 1993).A main obstacle to systematic studies of the economic effects of HRMP's in Japan was 'He does find, however, the statistically significant positive correlation between bonuses and employment level for the textiles industry.
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