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Diversified firms and Productivity in Japan

Author

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  • Atsushi Kawakami

    (Associate professor, Toyo University)

Abstract

This study analyzed the relationship between the diversification of Japanese corporate firms and productivity, using gFinancial Statements Statistics of Corporations by Industry h by the Ministry of Finance. The diversification indicated by the statistics showed that the share for diversified firms declined substantially from 2003. The diversification tendency was stronger for non - manufacturing industries than for manufacturing industries and less for specialized industries. Enterprises were diversified to expand into real estate, rental service and retail/wholesale industries. Manufacturers were diversified within the manufacturing sector. Diversified firms, though featuring less productivity than non - diversified ones, tended to improve productivity over a long time. The improvement was greater for firms with greater management divisions. Non - manufacturing firms diversified to expand into manufacturing reduced productivity.

Suggested Citation

  • Atsushi Kawakami, 2017. "Diversified firms and Productivity in Japan," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 13(2), pages 153-166, October.
    • Handle: RePEc:mof:journl:ppr13_02_04
    as

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    File URL: https://www.mof.go.jp/english/pri/publication/pp_review/fy2017/ppr13_02_04.pdf
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    References listed on IDEAS

    as
    1. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2010. "Multiple-Product Firms and Product Switching," American Economic Review, American Economic Association, vol. 100(1), pages 70-97, March.
    2. Robert DEKLE & KAWAKAMI Atsushi & KIYOTAKI Nobuhiro & MIYAGAWA Tsutomu, 2015. "Product Dynamics and Aggregate Shocks: Evidence from Japanese product and firm level data," Discussion papers 15137, Research Institute of Economy, Trade and Industry (RIETI).
    3. Goto, Mika & Low, Angie & Makhija, Anil K., 2008. "Diversification, Productivity, and Financial Constraints Empirical Evidence from the US Electric Utility Industry," Working Paper Series 2008-3, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
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    Cited by:

    1. Matthias Raddant & Hiroshi Takahashi, 2022. "Corporate boards, interorganizational ties and profitability: the case of Japan," Empirical Economics, Springer, vol. 62(3), pages 1365-1406, March.
    2. Hazem KRICHENE & ARATA Yoshiyuki & Abhijit CHAKRABORTY & FUJIWARA Yoshi & INOUE Hiroyasu, 2018. "How Firms Choose their Partners in the Japanese Supplier-Customer Network? An application of the exponential random graph model," Discussion papers 18011, Research Institute of Economy, Trade and Industry (RIETI).
    3. Raddant, Matthias & Takahashi, Hiroshi, 2019. "The Japanese corporate board network," Kiel Working Papers 2130, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    Diversification; Total factor productivity;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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