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The evolution of the productivity dispersion of firms - A reevaluation of its determinants in the case of Japan

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  • ITO Keiko
  • Sebastien LECHEVALIER

Abstract

There is a growing body of literature analyzing empirically the evolution of productivity dispersion at the firm level and its determinants. This paper contributes to this literature by investigating the case of Japanese firms during the so-called "Lost Decade" (1992-2005), which is still under-analyzed. We use a firm-level panel dataset taken from a large-scale administrative survey, the Basic Survey of Japanese Business Structure and Activities (BSBSA) for the years 1994-2003. Our results can be summarized as follows. First, we confirm that there was an overall increase in both labor productivity and total factor productivity dispersion, especially in the manufacturing sector from 1998 onward. Second, in the case of Japanese firms during the Lost Decade, and contrary to what has been found for some other countries, we find no significant impact of the introduction of information and communication technologies (ICT) on productivity dispersion. On the other hand, we do find evidence of a significant and positive impact of internationalization on productivity dispersion. In addition, the evolution of the competitive environment appears to play a role: we find that the increase in the Hershman-Herfindahl index observed in some sectors, which characterizes a more oligopolistic environment, is associated with an increase in productivity dispersion.

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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 08014.

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Length: 38 pages
Date of creation: May 2008
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Handle: RePEc:eti:dpaper:08014

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Citations

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Cited by:
  1. Sebastien Lechevalier & Cyrille Dossougoin & Christophe Hurlin & Satoko Takaoka, 2014. "How did the Japanese Employment System Change?Investigating the Heterogeneity of Downsizing Practices across Firms," KIER Working Papers 883, Kyoto University, Institute of Economic Research.
  2. Kalantzis, Y. & Kambayashi, R. & Lechevalier, S., 2012. "Wage and Productivity differentials in Japan. The Role of Labor Market Mechanisms," Working papers, Banque de France 399, Banque de France.
  3. Daniela Maggioni, 2013. "Productivity Dispersion and its Determinants: The Role of Import Penetration," Journal of Industry, Competition and Trade, Springer, Springer, vol. 13(4), pages 537-561, December.
  4. ITO Keiko & LECHEVALIER Se'bastien, 2010. "Why Do Some Firms Persistently Outperform Others? An investigation of the interactions between innovation and export strategies," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 10037, Research Institute of Economy, Trade and Industry (RIETI).
  5. Keiko ITO, 2012. "Sources of Learning-by-Exporting Effects: Does Exporting Promote Innovation?," Working Papers, Economic Research Institute for ASEAN and East Asia (ERIA) DP-2012-06, Economic Research Institute for ASEAN and East Asia (ERIA).
  6. ANDO Mitsuyo & KIMURA Fukunari, 2012. "International Production Networks and Domestic Operations of Japanese Manufacturing Firms: Normal periods and the Global Financial Crisis," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 12047, Research Institute of Economy, Trade and Industry (RIETI).

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