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The Diversity of Capitalism and Heterogeneity of Firms - A Case Study of Japan during the Lost Decade

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Author Info
Sébastien Lechevalier () (CRCCJ - Centre de Recherche Chine, Corée, Japon - CNRS : UMR8173 - Ecole des Hautes Etudes en Sciences Sociales)
Abstract

Most institutional theories of the diversity of capitalism (at least implicitly) assume the existence of a representative firm in each type of capitalism. Based on a case study of Japan during the Lost Decade (1992-2005), this paper aims at showing that this assumption introduces severe drawbacks in the analysis of Japanese capitalism in crisis. After having proposed a survey of theories of Japanese capitalism and of its crisis, we assess the increasing heterogeneity of Japanese firms since the beginning of the 1990s, in terms of performances and “models”, and propose some explanations of this increasing heterogeneity, which concerns firms of similar size and belonging to the same sectors. We then propose an alternative interpretation of this crisis - the lack of coordination of an increasing heterogeneity - and argue that it requires a new characterization of Japanese capitalism. In the final part, we extend our analysis beyond the Japanese case in arguing that our framework, which is based on an alternative theory of the firm, on the study of the evolution of the heterogeneity of organizations, and on the analysis of aggregation and coordination of the micro behaviors through institutions, provides a more dynamic understanding of institutional change.

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Paper provided by HAL in its series Post-Print with number halshs-00370523_v1.

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Date of creation: Oct 2007
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Publication status: Published, Evolutionary and Institutional Economic Review, 2007, 4, 1, 113-142
Handle: RePEc:hal:journl:halshs-00370523_v1

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Keywords: Japanese capitalism; heterogeneity of firms; coordination; institutional change; organizational change;

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  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. [Downloadable!] (restricted)
  2. 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. [Downloadable!] (restricted)
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  3. Hurlin, Christophe & Lechevalier, Sébastien, 2003. "The heterogeneity of employment adjustment across Japanese firms. A study using panel data," CEPREMAP Working Papers (Couverture Orange) 0310, CEPREMAP. [Downloadable!]
  4. Nelson, Richard R, 1981. "Research on Productivity Growth and Productivity Differences: Dead Ends and New Departures," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 1029-64, September. [Downloadable!] (restricted)
  5. Aoki, Masahiko, 1989. "The nature of the Japanese firm as a nexus of employment and financial contracts: An overview," Journal of the Japanese and International Economies, Elsevier, vol. 3(4), pages 345-366, December. [Downloadable!] (restricted)
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