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Global competition and labor-intensive production in SMEs: Firm-level evidence from Japan at the threshold of the lost decades

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  • HASHIMOTO, Yuki

Abstract

We analyze the effect of perceived global competition on firms’ reorganization plans. Using firm-level survey data from Japanese manufacturing SMEs in the late 1990s, we find that manufacturing SMEs perceiving intense global competition were more likely to consider hiring low-skilled immigrants despite being reluctant to increase R&D investment. This suggests that these SMEs were shifting towards becoming more labor-intensive organizations. Additionally, the positive relationship between perceived global competition and the intention to hire immigrant workers is partially mediated by difficulties in retaining young workers.

Suggested Citation

  • HASHIMOTO, Yuki, 2025. "Global competition and labor-intensive production in SMEs: Firm-level evidence from Japan at the threshold of the lost decades," Journal of the Japanese and International Economies, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:jjieco:v:75:y:2025:i:c:s0889158324000467
    DOI: 10.1016/j.jjie.2024.101350
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