Advanced Search
MyIDEAS: Login to save this article or follow this journal

When did firms become more different? Time-varying firm-specific volatility in Japan

Contents:

Author Info

  • De Veirman, Emmanuel
  • Levin, Andrew T.

Abstract

We document how firm-specific volatility in sales, earnings and employment growth evolved year by year in Japan. Our volatility measure also indicates the evolution of firm turnover. We find that patterns in firm-specific volatility have changed when macroeconomic circumstances have. Firm turnover declined during the economic stagnation of 1991–1997. The deep downturn of fiscal years 1998–2002 coincided with a substantial increase in turnover in market, profit and employment shares. Firm volatility tended to decline during the recovery after 2002. We assess whether the rise in firm turnover and deep downturn in 1998–2002 indicate that after a period of stagnation, weak firms were finally allowed to shrink or fail. Our evidence suggests that the widening in the firm growth distribution at that time did not reflect weak firms shrinking relative to healthy firms, indicating that the two recessions in 1998–2002 were not “cleansing”.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S0889158312000470
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 26 (2012)
Issue (Month): 4 ()
Pages: 578-601

as in new window
Handle: RePEc:eee:jjieco:v:26:y:2012:i:4:p:578-601

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622903

Related research

Keywords: Firm volatility; Firm health; Zombie lending; Cleansing recessions;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Shin-ichi Fukuda & Jun-ichi Nakamura, 2010. "Why Did ?Zombie? Firms Recover in Japan?," CARF F-Series, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo CARF-F-224, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
  2. Chang-Jin Kim & Charles R. Nelson, 1999. "Has The U.S. Economy Become More Stable? A Bayesian Approach Based On A Markov-Switching Model Of The Business Cycle," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 81(4), pages 608-616, November.
  3. Diego A. Comin & Thomas Philippon, 2006. "The Rise in Firm-Level Volatility: Causes and Consequences," NBER Chapters, National Bureau of Economic Research, Inc, in: NBER Macroeconomics Annual 2005, Volume 20, pages 167-228 National Bureau of Economic Research, Inc.
  4. Gaston, Noel & Kishi, Tomoko, 2007. "Part-time workers doing full-time work in Japan," Journal of the Japanese and International Economies, Elsevier, Elsevier, vol. 21(4), pages 435-454, December.
  5. Stephen Davis & John Haltiwanger & Ron Jarmin & Javier Miranda, 2006. "Volatility and Dispersion in Business Growth Rates: Publicly Traded Versus Privately Held Firms," Working Papers, Center for Economic Studies, U.S. Census Bureau 06-17, Center for Economic Studies, U.S. Census Bureau.
  6. Watanabe, Wako, 2010. "Does a large loss of bank capital cause Evergreening? Evidence from Japan," Journal of the Japanese and International Economies, Elsevier, Elsevier, vol. 24(1), pages 116-136, March.
  7. Gabriel Perez-Quiros & Margaret M. McConnell, 2000. "Output Fluctuations in the United States: What Has Changed since the Early 1980's?," American Economic Review, American Economic Association, American Economic Association, vol. 90(5), pages 1464-1476, December.
  8. Joe Peek & Eric S. Rosengren, 2003. "Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan," NBER Working Papers 9643, National Bureau of Economic Research, Inc.
  9. Ricardo J. Caballero & Takeo Hoshi & Anil K. Kashyap, 2008. "Zombie Lending and Depressed Restructuring in Japan," American Economic Review, American Economic Association, American Economic Association, vol. 98(5), pages 1943-77, December.
  10. Emmanuel De Veirman, 2007. "Which Nonlinearity in the Phillips Curve? The Absence of Accelerating Deflation in Japan," Economics Working Paper Archive, The Johns Hopkins University,Department of Economics 536, The Johns Hopkins University,Department of Economics.
  11. Yasushi Hamao & Jianping Mei & Yexiao Xu, 2007. "Unique Symptoms of Japanese Stagnation: An Equity Market Perspective," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 39(4), pages 901-923, 06.
  12. Alan Ahearne & Naoki Shinada, 2005. "Zombie firms and economic stagnation in Japan," International Economics and Economic Policy, Springer, Springer, vol. 2(4), pages 363-381, December.
  13. Shin-ichi Fukuda & Munehisa Kasuya & Jouchi Nakajima, 2005. "Bank Health and Investment: An Analysis of Unlisted Companies in Japan," CARF F-Series, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo CARF-F-029, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
  14. Diego Comin & Sunil Mulani, 2006. "Diverging Trends in Aggregate and Firm Volatility," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 88(2), pages 374-383, May.
  15. Emmanuel De Veirman & Andrew Levin, 2014. "Cyclical changes in firm volatility," DNB Working Papers, Netherlands Central Bank, Research Department 408, Netherlands Central Bank, Research Department.
  16. Uesugi, Iichiro, 2008. "Efficiency of Credit Allocation and Effectiveness of Government Credit Guarantees: Evidence from Japanese Small Businesses," PIE/CIS Discussion Paper, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University 353, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  17. Fukuda, Shin-ichi & Kasuya, Munehisa & Akashi, Kentaro, 2009. "Impaired bank health and default risk," Pacific-Basin Finance Journal, Elsevier, Elsevier, vol. 17(2), pages 145-162, April.
  18. Smith, David C., 2003. "Loans to Japanese borrowers," Journal of the Japanese and International Economies, Elsevier, Elsevier, vol. 17(3), pages 283-304, September.
  19. repec:aei:rpaper:25796 is not listed on IDEAS
  20. David C. Smith, 2003. "Loans to Japanese borrowers," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 769, Board of Governors of the Federal Reserve System (U.S.).
  21. Sekine, Toshitaka & Kobayashi, Keiichiro & Saita, Yumi, 2003. "Forbearance Lending: The Case of Japanese Firms," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, Institute for Monetary and Economic Studies, Bank of Japan, vol. 21(2), pages 69-92, August.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jjieco:v:26:y:2012:i:4:p:578-601. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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