The Japanese people are hard workers, and this has had contributed greatly to economic growth of the country. In this context, Japanese people improve on even Americans are conventionally understood to be the world’s most hard-working people. Japan is the world’s 3rd biggest economy in the world. Nevertheless, because of the recent earthquake, the economy of Japan has for the moment taken a turn for the worse (United Nations, 2011). In addition, spending on consumer electronics products has decreased even as expenditure on essential items has increased (United Nations, 2011). Closer economic analysis of Japan reveals that there are certain significant areas such as social services and education that have not been accorded much importance when allotting financial aid in times of monetary crisis.
The government in Japan has implemented stringent environmental regulations on innovative activity. The increases in R&D investment evident are stimulated by the regulatory stringency (Hamamoto, 2005). This implies that the pollution control expenses have a positive link with the R&D expenditures and have a negative relationship with the average age of capital stock.