Closure within multi-plant firms: evidence from Japan

In the literature there is substantial evidence that a plant is more likely to be closed down if it is owned by a firm with other plants or is owned by a multinational enterprise (MNE). But does ownership or multi-plant status matter for which plants are closed? Using Japanese data we study plant closure by multi-plant MNEs and non-MNEs. We show that both organisational forms raise the probability of plant exit and that plants that are relatively small and capital unintensive relative to the rest of the firm are significantly more likely to exit. Copyright Kiel Institute 2012