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Product Switching and Firm Performance in Japan - Empirical Analysis Based on the Census of Manufacturers

Author

Listed:
  • Atsushi Kawakami

    (Associate Professor, Global Exchange Office for Research and Education, Gakushuin University)

  • Tsutomu Miyagawa

    (Professor, Faculty of Economics, Gakushuin University)

Abstract

Following Bernard, Redding and Schott (2010), we have constructed product and firm level data on Japanese manufacturing firms using the Census of Manufacturers. Our empirical analysis based on the constructed data shows that multiple-product firms perform better than single-product firms and their labor productivity growth rates are higher. Empirical studies at the industry level show that an unregulated, competitive environment stimulates product switching. At the firm level, product switching behavior improves firm performance, including employment, while the firms that reduce the number of their products see a decline in labor productivity, due to output reduction exceeding the magnitude of the reduction in employment.

Suggested Citation

  • Atsushi Kawakami & Tsutomu Miyagawa, 2013. "Product Switching and Firm Performance in Japan - Empirical Analysis Based on the Census of Manufacturers," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 9(2), pages 287-314, March.
    • Handle: RePEc:mof:journl:ppr021b
    as

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    File URL: http://warp.da.ndl.go.jp/info:ndljp/pid/11217434/www.mof.go.jp/english/pri/publication/pp_review/ppr021/ppr021b.pdf
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    References listed on IDEAS

    as
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    2. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2003. "Product Choice and Product Switching," Yale School of Management Working Papers ysm381, Yale School of Management.
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. MIYAGAWA Tsutomu & ISHIKAWA Takayuki, 2019. "On the Decline of R&D Efficiency," Discussion papers 19052, Research Institute of Economy, Trade and Industry (RIETI).
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    3. Chin Hee Hahn & Keiko Ito, 2020. "The Effect of Exporting on Creative Destruction and a Plant's Average Product Characteristics in Japan and Korea," The Developing Economies, Institute of Developing Economies, vol. 58(3), pages 195-226, September.
    4. Yuping Deng & Yanrui Wu & Helian Xu, 2019. "Environmental Regulation and Export Product Quality: Evidence from Chinese Firms," Economics Discussion / Working Papers 19-14, The University of Western Australia, Department of Economics.

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    More about this item

    Keywords

    Entry; Exit; Multiple-Product Firm; Product Switching; Labor Productivity; TFP CPropensity Score Matching Model;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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