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Productivity dynamics in Japan and the negative exit effect

Author

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  • Kenta Ikeuchi
  • YoungGak Kim
  • Hyeog Ug Kwon
  • Kyoji Fukao

Abstract

Previous studies on productivity dynamics in Japan have suggested that one of the reasons for sluggish productivity growth in the economy was that highly productive firms exit the market, giving rise to a negative exit effect. This study is the first using census data and a large‐scale micro data set to verify the negative exit effect in Japan. We conduct analyses of productivity dynamics using the micro data. The results show that there is indeed a negative exit effect in Japan and that this is driven mainly by the exit of a small number of highly productive firms.

Suggested Citation

  • Kenta Ikeuchi & YoungGak Kim & Hyeog Ug Kwon & Kyoji Fukao, 2022. "Productivity dynamics in Japan and the negative exit effect," Contemporary Economic Policy, Western Economic Association International, vol. 40(1), pages 204-217, January.
    • Handle: RePEc:bla:coecpo:v:40:y:2022:i:1:p:204-217
    DOI: 10.1111/coep.12546
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    4. IKEUCHI Kenta & KIM Young Gak & KWON Hyeog Ug & FUKAO Kyoji, 2018. "Productivity Dynamics in Japanese Small and Medium-Sized Enterprises: An empirical analysis based on the Credit Risk Database (Japanese)," Discussion Papers (Japanese) 18019, Research Institute of Economy, Trade and Industry (RIETI).
    5. Inui, Tomohiko & Kim, YoungGak & Kwon, Hyeog Ug & Fukao, Kyoji, 2015. "Productivity Dynamics and Japan's Economic Growth: An Empirical Analysis Based on the Financial Statements Statistics of Corporations by Industry," Economic Review, Hitotsubashi University, vol. 66(4), pages 289-300, October.
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    Cited by:

    1. Kotone Yamada & Yukio Minoura & Jouchi Nakajima & Tomoyuki Yagi, 2023. "Corporate Finance Facility and Resource Allocation: Research Trends and Developments during the Spread of COVID-19," Bank of Japan Working Paper Series 23-E-1, Bank of Japan.
    2. Kosuke Aoki & Yoshihiko Hogen & Yojiro Ito & Kenji Kanai & Kosuke Takatomi, 2024. "Determinants of Price Markups at Japanese Firms and Implications for Productivity," Bank of Japan Working Paper Series 24-E-15, Bank of Japan.

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    More about this item

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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