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Globalisation, Multinationals and Productivity in Japan’s Lost Decade

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  • Tomohiko Inui
  • Richard Kneller
  • Toshiyuki Matsuura
  • Danny McGowan

Abstract

Myriad hypotheses have been advanced to explain the dismal performance of the post-1990 Japanese economy. In this paper we use plant and firm data to investigate the issue. The low rate of productivity growth in Japan is also often seen as a product of Japanese MNEs offshoring production and shutting plants that are relative to others in their industry, high productivity. We find that this is true, plants shut by MNEs are relatively more productive than the industry average, but they are generally weaker elements of the MNE more generally. This behaviour is also not distinct to MNEs. Our analysis suggests that the rate of productivity growth within firms is also partly a consequence of low entry and exit rates. Generally we find that the determinants of productivity change are similar to those found for other countries, but that productivity improvement is lower in industries in which globalisation is higher. The low rate of entry and exit in Japan therefore means that this affects more firms than would otherwise have been the case.

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Paper provided by University of Nottingham, GEP in its series Discussion Papers with number 10/04.

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Handle: RePEc:not:notgep:10/04

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Keywords: Globalisation; Multinationals; Japan; Productivity; Plant Exit; Offshoring;

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Citations

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Cited by:
  1. Richard Kneller & Danny McGowan & Tomohiko Inui & Toshiyuki Matsuura, 2012. "Closure within multi-plant firms: evidence from Japan," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(4), pages 647-668, December.
  2. Ioannis Bournakis & Sushanta Mallick & David Kernohan & Dimitris A.Tsouknidis, 2013. "Measuring Firm-Level Productivity Convergence in the UK: The Role of Taxation and R&D Investment," Working Papers 45, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
  3. Norback, Pehr-Johan & Tekin-Koru, Ayca & Waldkirch, Andreas, 2013. "Multinational Firms and Plant Divestiture," MPRA Paper 45957, University Library of Munich, Germany.

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