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Structural Changes in Japanese Firms: Business Dynamism in an Aging Society

Author

Listed:
  • Mr. Gee Hee Hong
  • Arata Ito
  • Yukiko Umeno Saito
  • Anh Thi Ngoc Nguyen

Abstract

The COVID-19 pandemic has posed a serious threat to the survival of Japanese firms, highlighting the importance of understanding how and why firms exit. In this paper, we use a rich firm-level dataset of Japanese firms to document how firm exit patterns have evolved between 2007 and 2017. Firm exit patterns have been heavily influenced by Japan’s demographic trends, as a majority of exits in recent years were voluntary exits of firms (business closures) owned by CEOs aged 65 years or older without business successors. In contrast to this increase in voluntary exits, other “traditional” firm exits (such as bankruptcies), have declined. These findings underscore the importance of addressing business transition issues in a rapidly aging society.

Suggested Citation

  • Mr. Gee Hee Hong & Arata Ito & Yukiko Umeno Saito & Anh Thi Ngoc Nguyen, 2020. "Structural Changes in Japanese Firms: Business Dynamism in an Aging Society," IMF Working Papers 2020/182, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2020/182
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    Citations

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    Cited by:

    1. Masayuki Morikawa, 2023. "Productivity and wages of firms using COVID‐19‐related support policies," Social Science Quarterly, Southwestern Social Science Association, vol. 104(3), pages 202-213, May.
    2. MOTOHASHI Kazuyuki, 2021. "Productivity of Firms Using Relief Policies During the COVID-19 Crisis," Policy Discussion Papers 21006, Research Institute of Economy, Trade and Industry (RIETI).
    3. Morikawa, Masayuki, 2021. "Productivity of firms using relief policies during the COVID-19 crisis," Economics Letters, Elsevier, vol. 203(C).
    4. Gee Hee HONG & ITO Arata & NGUYEN Thi Ngoc Anh & SAITO Yukiko, 2022. "Did the COVID-19 Pandemic Create More Zombie Firms in Japan?," Discussion papers 22072, Research Institute of Economy, Trade and Industry (RIETI).

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