IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/11064.html
   My bibliography  Save this paper

Revisiting Productivity Differences and Firm Turnover: Evidence from product-based TFP measures in the Japanese manufacturing industries

Author

Listed:
  • KAWAKAMI Atsushi
  • MIYAGAWA Tsutomu
  • TAKIZAWA Miho

Abstract

Following Foster, Haltiwanger, and Syverson (2008), we construct physical output based TFP (TFPQ) measures using data from the Census of Manufactures. We find that productivity differences among business establishments using TFPQ are larger than those using the traditional revenue-based TFP measures (TFPR). The negative correlation between physical output and output prices implies that establishments are facing a downward demand curve and the traditional measures of TFP are affected by idiosyncratic demand shocks. Probit estimations regarding exit behavior show that the combined effects of physical productivity improvement and higher prices through the increase in demand result in a lower probability of exit. Breaking down aggregate productivity growth using TFPQ, we find that the contribution of the net entry effects the largest factor to productivity improvement, in contrast to previous Japanese studies. Our results provide a more positive foundation for "creative destruction" policies than previous studies suggest.

Suggested Citation

  • KAWAKAMI Atsushi & MIYAGAWA Tsutomu & TAKIZAWA Miho, 2011. "Revisiting Productivity Differences and Firm Turnover: Evidence from product-based TFP measures in the Japanese manufacturing industries," Discussion papers 11064, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:11064
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/11e064.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nishimura, Kiyohiko G. & Nakajima, Takanobu & Kiyota, Kozo, 2005. "Does the natural selection mechanism still work in severe recessions?: Examination of the Japanese economy in the 1990s," Journal of Economic Behavior & Organization, Elsevier, vol. 58(1), pages 53-78, September.
    2. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
    3. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters, in: New Developments in Productivity Analysis, pages 303-372, National Bureau of Economic Research, Inc.
    4. Kyoji Fukao & Hyeog Ug Kwon, 2006. "Why Did Japan'S Tfp Growth Slow Down In The Lost Decade? An Empirical Analysis Based On Firm‐Level Data Of Manufacturing Firms," The Japanese Economic Review, Japanese Economic Association, vol. 57(2), pages 195-228, June.
    5. KAWAKAMI Atsushi & MIYAGAWA Tsutomu, 2010. "Product Switching and Firm Performance in Japan," Discussion papers 10043, Research Institute of Economy, Trade and Industry (RIETI).
    6. TAKII Katsuya, 2011. "Persistent Productivity Differences Between Firms," Discussion papers 11048, Research Institute of Economy, Trade and Industry (RIETI).
    7. Kozo Kiyota & Miho Takizawa, 2006. "The Shadow of Death: Pre-exit Performance of Firms in Japan," Discussion papers 06033, Research Institute of Economy, Trade and Industry (RIETI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. MORIKAWA Masayuki, 2017. "Dispersion and Volatility of TFPQ in Service Industries," Discussion papers 17088, Research Institute of Economy, Trade and Industry (RIETI).
    2. MORIKAWA Masayuki, 2019. "Price Competition vs. Quality Competition: Evidence from a Survey," Discussion papers 19075, Research Institute of Economy, Trade and Industry (RIETI).
    3. Morikawa, Masayuki, 2021. "Price competition vs. quality competition: Evidence from firm surveys," Journal of Economics and Business, Elsevier, vol. 116(C).
    4. Morikawa, Masayuki, 2017. "Impact of Foreign Tourists on Productivity in the Accommodation Industry : A panel data analysis," SSPJ Discussion Paper Series DP17-012, Service Sector Productivity in Japan: Determinants and Policies, Institute of Economic Research, Hitotsubashi University.
    5. MORIKAWA Masayuki, 2017. "Dispersion and Volatility of TFPQ in Service Industries," Discussion papers 17088, Research Institute of Economy, Trade and Industry (RIETI).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jose Asturias & Sewon Hur & Timothy J. Kehoe & Kim J. Ruhl, 2023. "Firm Entry and Exit and Aggregate Growth," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(1), pages 48-105, January.
    2. 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.
    3. Morikawa, Masayuki, 2021. "Productivity of firms using relief policies during the COVID-19 crisis," Economics Letters, Elsevier, vol. 203(C).
    4. Tetsushi Murao, 2017. "Aggregate Productivity Growth Decomposition: an Overview," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 13(3), pages 269-286, November.
    5. Toshihiko Mukoyama, 2009. "On the Establishment Dynamics in the United States and Japan," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 27(1), pages 53-74, November.
    6. Tomoyuki Yagi & Kakuho Furukawa & Jouchi Nakajima, 2022. "Productivity Trends in Japan - Reviewing Recent Facts and the Prospects for the Post-COVID-19 Era -," Bank of Japan Working Paper Series 22-E-10, Bank of Japan.
    7. Doan Thi Thanh Ha & Kozo Kiyota, 2014. "Firm-Level Evidence on Productivity Differentials and Turnover in Vietnamese Manufacturing," The Japanese Economic Review, Japanese Economic Association, vol. 65(2), pages 193-217, June.
    8. Flora Bellone & Patrick Musso & Michel Quéré & Lionel Nesta, 2006. "Productivity and Market Selection of French Manufacturing Firms in the Nineties," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 319-349.
    9. Daniel A. Dias & Carlos Robalo Marques, 2021. "Every Cloud Has a Silver Lining: Cleansing Effects of the Portuguese Financial Crisis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(2), pages 352-376, April.
    10. Mary Hallward-Driemeier & Bob Rijkers, 2013. "Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1788-1810, December.
    11. repec:hal:spmain:info:hdl:2441/7185 is not listed on IDEAS
    12. Alessandro Arrighetti & Fabio Landini & Andrea Lasagni, 2021. "Swimming upstream throughout the turmoil: Evidence on firm growth during the great recession," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(3), pages 322-344, July.
    13. Uchida, Hirofumi, 2020. "Natural selection: A review of studies on firms’ exit and efficiency," MPRA Paper 103938, University Library of Munich, Germany.
    14. Redha Fares & Amélie Guillin & Claude Mathieu, 2020. "Failing and exporting firms: a paradox?," Erudite Working Paper 2020-08, Erudite.
    15. Nakamura, Koji & Kaihatsu, Sohei & Yagi, Tomoyuki, 2019. "Productivity improvement and economic growth: lessons from Japan," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 57-79.
    16. HOSONO Kaoru & TAKIZAWA Miho, 2019. "Dynamic Productivity Decomposition with Allocative Efficiency," Discussion papers 19069, Research Institute of Economy, Trade and Industry (RIETI).
    17. HOSONO Kaoru, 2009. "Financial Crisis, Firm Dynamics and Aggregate Productivity in Japan," Discussion papers 09012, Research Institute of Economy, Trade and Industry (RIETI).
    18. Morikawa, Masayuki, 2013. "Productivity and survival of family firms in Japan," Journal of Economics and Business, Elsevier, vol. 70(C), pages 111-125.
    19. repec:spo:wpmain:info:hdl:2441/7185 is not listed on IDEAS
    20. Koji Nakamura & Sohei Kaihatsu & Tomoyuki Yagi, 2018. "Productivity Improvement and Economic Growth," Bank of Japan Working Paper Series 18-E-10, Bank of Japan.
    21. Wei Shao & Yangyang Sun & Xiao Bai & Muhammad Abubakr Naeem & Farhad Taghizadeh‐Hesary, 2023. "Zombie enterprises, crowding out effect, and total factor productivity: Empirical evidence from Chinese manufacturing listed companies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 4512-4531, October.
    22. NISHIOKA Shuichiro & OKUBO Toshihiro & TANAKA Mari, 2021. "Regional Banking and Plant Survival in Japan," Discussion papers 21021, Research Institute of Economy, Trade and Industry (RIETI).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:11064. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.