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The Shadow of Death: Pre-exit Performance of Firms in Japan

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Author Info
Kozo Kiyota
Miho Takizawa

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Abstract

This paper examines the pre-exit productivity performance and asks how productivity affects future survival, controlling for firm size and unobserved firm heterogeneity. Based on firm-level data in Japan for 1995-002, we found that firms did not face "sudden death" but there was a "shadow of death." Future exiting firms had lower performance five years before their exit. Moreover, unobserved firm heterogeneity had a statistically significant effect on firm survival analysis. However, we also found that the effects of unobserved heterogeneity were not very large and thus did not reverse the conclusion.

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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 06033.

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Length: 19 pages
Date of creation: Aug 2006
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Handle: RePEc:eti:dpaper:06033

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  6. Kimura, Fukunari & Fujii, Takamune, 2003. "Globalizing activities and the rate of survival:: Panel data analysis on Japanese firms," Journal of the Japanese and International Economies, Elsevier, vol. 17(4), pages 538-560, December. [Downloadable!] (restricted)
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  7. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Blackwell Publishing, vol. 51(1), pages 91-112, 03. [Downloadable!] (restricted)
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  19. Dunne, Timothy & Klimek, Shawn D. & Roberts, Mark J., 2005. "Exit from regional manufacturing markets: The role of entrant experience," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 399-421, June. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Flora Bellone & Patrick Musso & Lionel Nesta & Michel Quéré, 2006. "Productivity and Market Selection of French Manufacturing Firms in the Nineties," Documents de Travail de l'OFCE 2006-04, Observatoire Francais des Conjonctures Economiques (OFCE). [Downloadable!]
  2. HOSONO Kaoru, 2009. "Financial Crisis, Firm Dynamics and Aggregate Productivity in Japan," Discussion papers 09012, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
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