[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/jjieco/v26y2012i1p110-128.html
   My bibliography  Save this article

Globalisation, multinationals and productivity in Japan’s lost decade

Author

Listed:
  • Kneller, Richard
  • McGowan, Danny
  • Inui, Tomohiko
  • Matsuura, Toshiyuki
Abstract
This paper studies the process of plant exit and productivity growth in Japan during the ‘lost decade’. A productivity decomposition shows the low rate of productivity growth at the aggregate level to be due to slow within plant productivity growth and a small contribution from the entry and exit components. We find the causes of plant exit to be similar to results in other country contexts except we find no effect from import competition. Our results suggest that the low productivity growth is attributable to high entry barriers and little to the shutting of productive plants by MNEs.

Suggested Citation

  • Kneller, Richard & McGowan, Danny & Inui, Tomohiko & Matsuura, Toshiyuki, 2012. "Globalisation, multinationals and productivity in Japan’s lost decade," Journal of the Japanese and International Economies, Elsevier, vol. 26(1), pages 110-128.
    • Handle: RePEc:eee:jjieco:v:26:y:2012:i:1:p:110-128
    DOI: 10.1016/j.jjie.2011.12.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0889158311000724
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jjie.2011.12.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nishimura, Kiyohiko G. & Nakajima, Takanobu & Kiyota, Kozo, 2005. "Does the natural selection mechanism still work in severe recessions?: Examination of the Japanese economy in the 1990s," Journal of Economic Behavior & Organization, Elsevier, vol. 58(1), pages 53-78, September.
    2. Holger Görg & Eric Strobl, 2016. "Multinational Companies, Technology Spillovers and Plant Survival," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT, chapter 16, pages 289-303, World Scientific Publishing Co. Pte. Ltd..
    3. Bandick, Roger, 2007. "Multinationals and Plant Survivals in Swedish Manufacturing," Working Papers 2007:7, Örebro University, School of Business.
    4. David Audretsch & Patrick Houweling & A. Thurik, 2000. "Firm Survival in the Netherlands," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(1), pages 1-11, February.
    5. Griffith, Rachel & Redding, Stephen & Simpson, Helen, 2002. "Productivity Convergence and Foreign Ownership at the Establishment Level," CEPR Discussion Papers 3765, C.E.P.R. Discussion Papers.
    6. Fumio Hayashi & Edward C. Prescott, 2004. "The 1990s in Japan: a lost decade," Chapters, in: Paolo Onofri (ed.), The Economics of an Ageing Population, chapter 2, Edward Elgar Publishing.
    7. Holger Görg & Eric Strobl, 2016. "Multinational companies and indigenous development: An empirical analysis," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT, chapter 17, pages 305-322, World Scientific Publishing Co. Pte. Ltd..
    8. Ozcelik, Emre & Taymaz, Erol, 2004. "Does innovativeness matter for international competitiveness in developing countries?: The case of Turkish manufacturing industries," Research Policy, Elsevier, vol. 33(3), pages 409-424, April.
    9. Wolfgang Keller & Stephen R. Yeaple, 2009. "Multinational Enterprises, International Trade, and Productivity Growth: Firm-Level Evidence from the United States," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 821-831, November.
    10. Bernard, Andrew B. & Jensen, J. Bradford & Schott, Peter K., 2006. "Survival of the best fit: Exposure to low-wage countries and the (uneven) growth of U.S. manufacturing plants," Journal of International Economics, Elsevier, vol. 68(1), pages 219-237, January.
    11. Andrew B Bernard & J. Bradford Jensen, 2007. "Firm Structure, Multinationals, and Manufacturing Plant Deaths," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 193-204, May.
    12. Kimura, Fukunari & Fujii, Takamune, 2003. "Globalizing activities and the rate of survival:: Panel data analysis on Japanese firms," Journal of the Japanese and International Economies, Elsevier, vol. 17(4), pages 538-560, December.
    13. John R. Baldwin & Wulong Gu, 2006. "Plant turnover and productivity growth in Canadian manufacturing," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 15(3), pages 417-465, June.
    14. Alan Ahearne & Naoki Shinada, 2005. "Zombie firms and economic stagnation in Japan," International Economics and Economic Policy, Springer, vol. 2(4), pages 363-381, December.
    15. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters, in: New Developments in Productivity Analysis, pages 303-372, National Bureau of Economic Research, Inc.
    16. Fukunari Kimura & Kozo Kiyota, 2006. "Exports, FDI, and Productivity: Dynamic Evidence from Japanese Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(4), pages 695-719, December.
    17. Charles R. Hulten & Edwin R. Dean & Michael J. Harper, 2001. "New Developments in Productivity Analysis," NBER Books, National Bureau of Economic Research, Inc, number hult01-1.
    18. Aitken, Brian & Harrison, Ann & DEC, 1994. "Do domestic firms benefit from foreign direct investment? Evidence from panel data," Policy Research Working Paper Series 1248, The World Bank.
    19. Greenaway, David & Gullstrand, Joakim & Kneller, Richard, 2008. "Surviving globalisation," Journal of International Economics, Elsevier, vol. 74(2), pages 264-277, March.
    20. Pedro Portugal & José Mata, 2001. "The Survival of New Domestic and Foreign Owned Firms," Working Papers w200101, Banco de Portugal, Economics and Research Department.
    21. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
    22. Kyoji Fukao & Young Gak Kim & Hyeog Ug Kwon, 2006. "Plant Turnover and TFP Dynamics in Japanese Manufacturing," Hi-Stat Discussion Paper Series d06-180, Institute of Economic Research, Hitotsubashi University.
    23. Bee Yan Aw & Sukkyun Chung & Mark J. Roberts, 2003. "Productivity, output, and failure: a comparison of taiwanese and korean manufacturers," Economic Journal, Royal Economic Society, vol. 113(491), pages 485-510, November.
    24. Andrew B. Bernard & J. Bradford Jensen, 2004. "Why Some Firms Export," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 561-569, May.
    25. Jorgenson, Dale W. & Motohashi, Kazuyuki, 2005. "Information technology and the Japanese economy," Journal of the Japanese and International Economies, Elsevier, vol. 19(4), pages 460-481, December.
    26. Bernard, Andrew B & Jones, Charles I, 1996. "Comparing Apples to Oranges: Productivity Convergence and Measurement across Industries and Countries," American Economic Review, American Economic Association, vol. 86(5), pages 1216-1238, December.
    27. Andrew B. Bernard & Fredrik Sjoholm, 2003. "Foreign Owners and Plant Survival," NBER Working Papers 10039, National Bureau of Economic Research, Inc.
    28. Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February.
    29. Ricardo J. Caballero & Takeo Hoshi & Anil K. Kashyap, 2008. "Zombie Lending and Depressed Restructuring in Japan," American Economic Review, American Economic Association, vol. 98(5), pages 1943-1977, December.
    30. Silviano Pérez & Amparo Llopis & Juan Llopis, 2004. "The Determinants of Survival of Spanish Manufacturing Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 25(3), pages 251-273, August.
    31. J. Bradford Jensen & Andrew B Bernard, 2002. "The Deaths of Manufacturing Plants," Working Papers 02-15, Center for Economic Studies, U.S. Census Bureau.
    32. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-245, September.
    33. Joe Peek & Eric S. Rosengren, 2005. "Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan," American Economic Review, American Economic Association, vol. 95(4), pages 1144-1166, September.
    34. Bee Yan Aw & Xiaomin Chen & Mark J. Roberts, 1997. "Firm-level Evidence on Productivity Differentials, Turnover, and Exports in Taiwanese Manufacturing," NBER Working Papers 6235, National Bureau of Economic Research, Inc.
    35. David Greenaway & Joakim Gullstrand & Richard Kneller, 2008. "Firm Heterogeneity and the Geography of International Trade," Discussion Papers 08/41, University of Nottingham, GEP.
    36. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 91-112, March.
    37. Geroski, Paul A., 1991. "Innovation and small firms : Zoltan J. Acs and David B. Audretsch, (MIT Press, Cambridge, MA, 1990) pp. 212," International Journal of Industrial Organization, Elsevier, vol. 9(3), pages 473-474, September.
    38. Geroski, P A, 1991. "Innovation and the Sectoral," Economic Journal, Royal Economic Society, vol. 101(409), pages 1438-1451, November.
    39. Alvarez, Roberto & Görg, Holger, 2009. "Multinationals and plant exit: Evidence from Chile," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 45-51, January.
    40. Stefano Scarpetta & Philip Hemmings & Thierry Tressel & Jaejoon Woo, 2002. "The Role of Policy and Institutions for Productivity and Firm Dynamics: Evidence from Micro and Industry Data," OECD Economics Department Working Papers 329, OECD Publishing.
    41. John Haltiwanger, 1997. "Measuring and analyzing aggregate fluctuations: the importance of building from microeconomic evidence," Review, Federal Reserve Bank of St. Louis, issue May, pages 55-78.
    42. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    43. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1989. "The Growth and Failure of U. S. Manufacturing Plants," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(4), pages 671-698.
    44. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-564, September.
    45. Cowling, Keith & Tomlinson, Philip R, 2000. "The Japanese Crisis--A Case of Strategic Failure?," Economic Journal, Royal Economic Society, vol. 110(464), pages 358-381, June.
    46. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-1150, September.
    47. Griliches, Zvi & Regev, Haim, 1995. "Firm productivity in Israeli industry 1979-1988," Journal of Econometrics, Elsevier, vol. 65(1), pages 175-203, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mitsuo Inada & Yung-Hsing Guo, 2016. "Heterogeneous Impacts of a Change in Chinese FDI Regulations on Domestic Market Outcomes: Empirical Evidence from Taiwanese Plant Data," KIER Working Papers 934, Kyoto University, Institute of Economic Research.
    2. Pehr-Johan Norbäck & Ayça Tekin-Koru & Andreas Waldkirch, 2015. "Multinational Firms and Plant Divestiture," Review of International Economics, Wiley Blackwell, vol. 23(5), pages 811-845, November.
    3. Richard Kneller & Danny McGowan & Tomohiko Inui & Toshiyuki Matsuura, 2012. "Closure within multi-plant firms: evidence from Japan," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(4), pages 647-668, December.
    4. Marta Bisztray, 2016. "The effect of foreign-owned large plant closures on nearby firms," CERS-IE WORKING PAPERS 1623, Institute of Economics, Centre for Economic and Regional Studies.
    5. Min, Byung S. & Smyth, Russell, 2014. "Corporate governance, globalization and firm productivity," Journal of World Business, Elsevier, vol. 49(3), pages 372-385.
    6. OKUBO Toshihiro, 2021. "Foreign Direct Investment in China and Domestic Activities of Japanese Firms," Discussion papers 21023, Research Institute of Economy, Trade and Industry (RIETI).
    7. INUI Tomohiko & KODAMA Naomi, 2016. "The Effects of Japanese Customer Firms' Overseas Outsourcing on Supplier Firms' Performance," Discussion papers 16106, Research Institute of Economy, Trade and Industry (RIETI).
    8. Ioannis Bournakis & Sushanta Mallick & David Kernohan & Dimitris A.Tsouknidis, 2013. "Measuring Firm-Level Productivity Convergence in the UK: The Role of Taxation and R&D Investment," Working Papers 45, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richard Kneller & Danny McGowan & Tomohiko Inui & Toshiyuki Matsuura, 2012. "Closure within multi-plant firms: evidence from Japan," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(4), pages 647-668, December.
    2. Anna Maria Ferragina & Fernanda Mazzotta & Erol Taymaz & Kamil Yilmaz, 2013. "The Impact Of Fdi On Firm Survival And Employment: A Comparative Analysis For Turkey And Italy," ERSA conference papers ersa13p1211, European Regional Science Association.
    3. Richard I.D. Harris & Qian Cher Li, "undated". "Export-market dynamics and the probability of firm closure: Evidence for the UK," Working Papers 2008_17, Business School - Economics, University of Glasgow.
    4. Kozo Kiyota & Miho Takizawa, 2006. "The Shadow of Death: Pre-exit Performance of Firms in Japan," Discussion papers 06033, Research Institute of Economy, Trade and Industry (RIETI).
    5. Ferragina, Anna & Pittiglio, Rosanna & Reganati, Filippo, 2012. "Multinational status and firm exit in the Italian manufacturing and service sectors," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 363-372.
    6. Uchida, Hirofumi, 2020. "Natural selection: A review of studies on firms’ exit and efficiency," MPRA Paper 103938, University Library of Munich, Germany.
    7. Anna Maria Ferragina & Rosanna Pittiglio & Filippo Reganati, 2014. "Does multinational ownership affect firm survival in Italy?," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 15(2), pages 335-355, April.
    8. Rosanna Pittiglio & Filippo Reganati, 2015. "Multinational Enterprises, Technological Intensity and Firm Survival. Evidence from Italian Manufacturing and Services Firms," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(1), pages 87-106, March.
    9. Martyn Andrews & Lutz Bellmann & Thorsten Schank & Richard Upward, 2012. "Foreign-owned plants and job security," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(1), pages 89-117, April.
    10. Volpe Martincus, Christian & Carballo, Jerónimo, 2008. "Survival of New Exporters in Developing Countries: Does it Matter How They Diversify?," IDB Publications (Working Papers) 2494, Inter-American Development Bank.
    11. David Greenaway & Joakim Gullstrand & Richard Kneller, 2009. "Live or Let Die? Alternative Routes to Industry Exit," Open Economies Review, Springer, vol. 20(3), pages 317-337, July.
    12. Roger Bandick, 2010. "Multinationals and plant survival," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(4), pages 609-634, December.
    13. Richard I. D. Harris & Qian Cher Li, 2010. "Export‐Market Dynamics And The Probability Of Firm Closure: Evidence For The United Kingdom," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(2), pages 145-168, May.
    14. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2006. "Multi-Product Firms and Product Switching," NBER Working Papers 12293, National Bureau of Economic Research, Inc.
    15. Holger Görg & Marina-Eliza Spaliara, 2014. "Financial Health, Exports and Firm Survival: Evidence from UK and French Firms," Economica, London School of Economics and Political Science, vol. 81(323), pages 419-444, July.
    16. Veerle Miranda & Marialuz Moreno Badia & Ilke Van Beveren, 2012. "Globalization drives strategic product switching," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(1), pages 45-72, April.
    17. Andrew B Bernard & J. Bradford Jensen, 2007. "Firm Structure, Multinationals, and Manufacturing Plant Deaths," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 193-204, May.
    18. Flora Bellone & Patrick Musso & Michel Quéré & Lionel Nesta, 2006. "Productivity and Market Selection of French Manufacturing Firms in the Nineties," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 319-349.
    19. Redha Fares & Amélie Guillin & Claude Mathieu, 2020. "Failing and exporting firms: a paradox?," Erudite Working Paper 2020-08, Erudite.
    20. Adalgiso Amendola & Anna Maria Ferragina & Rosanna Pittiglio & Filippo Reganati, 2012. "Are exporters and multinational firms more resilient over a crisis? First evidence for manufacturing enterprises in Italy," Economics Bulletin, AccessEcon, vol. 32(3), pages 1914-1926.

    More about this item

    Keywords

    Exit; Productivity; Globalisation; Multinational firms; Japan;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jjieco:v:26:y:2012:i:1:p:110-128. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622903 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.