Does Natural Selection Mechanism Still Work in Severe Recessions? --]Examination of the Japanese Economy in the 1990s ---
AbstractThis paper investigates whether or not the natural selection mechanism (NSM) of economic Darwinism works in severe recessions. Although standard firm models imply the importance of NSM in an economy by showing firm's rational behavior on entry, surviv-ing, and exit leads to macro-level TFP growth, there is almost no evidence to demonstrate NSM works even in severe recessions and depressions. Based on micro data of the Basic Survey of Japanese Business Structure and Activities (BSJBSA) by Ministry of Economy, Trade and Industry, we construct a comprehensive firm-level panel dataset for Japan from 1994 to 1998, especially designed for the analysis of a firm's entry, survival, and exit and its relationship with TFP. Empirical results show that efficient firms in terms of TFP quit while inefficient ones survived in the banking-crisis period of 1996-1997. Besides, this phenomenon is mainly observed for new entrants and contributes substantially to a fall in macro TFP after 1996. These facts strongly suggest malfunctioning of NSM in severe recessions.
Download InfoIf 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.
Bibliographic InfoPaper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-222.
Length: 35 pages
Date of creation: May 2003
Date of revision:
Contact details of provider:
Postal: Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033
Web page: http://www.cirje.e.u-tokyo.ac.jp/index.html
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-05-18 (All new papers)
- NEP-HIS-2003-05-18 (Business, Economic & Financial History)
- NEP-SEA-2003-05-18 (South East Asia)
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.:
- John R. Baldwin & Paul K. Gorecki, 1991. "Firm Entry and Exit in the Canadian Manufacturing Sector, 1970-1982," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 300-323, May.
- Ariel Pakes & Richard Ericson, 1989.
"Empirical Implications of Alternative Models of Firm Dynamics,"
NBER Working Papers
2893, National Bureau of Economic Research, Inc.
- Pakes, Ariel & Ericson, Richard, 1998. "Empirical Implications of Alternative Models of Firm Dynamics," Journal of Economic Theory, Elsevier, vol. 79(1), pages 1-45, March.
- Pakes, A. & Ericson, R., 1990. "Empirical Implications Of Alternative Models Of Firm Dynamics," Papers 594, Yale - Economic Growth Center.
- Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
- Takeo Hoshi & Anil Kashyap, 2000.
"The Japanese Banking Crisis: Where Did It Come From and How Will It End?,"
in: NBER Macroeconomics Annual 1999, Volume 14, pages 129-212
National Bureau of Economic Research, Inc.
- Takeo Hoshi & Anil Kashyap, 1999. "The Japanese Banking Crisis: Where Did It Come From and How Will It End?," NBER Working Papers 7250, National Bureau of Economic Research, Inc.
- Griliches, Zvi & Regev, Haim, 1995. "Firm productivity in Israeli industry 1979-1988," Journal of Econometrics, Elsevier, vol. 65(1), pages 175-203, January.
- Tybout, James R, 1992. "Linking Trade and Productivity: New Research Directions," World Bank Economic Review, World Bank Group, vol. 6(2), pages 189-211, May.
- Chin Hee Hahn, 2000. "Entry, Exit, and Aggregate Productivity Growth: Micro Evidence on Korean Manufacturing," OECD Economics Department Working Papers 272, OECD Publishing.
- Emi Nakamura & Masao Nakamura (presenter) & Takanobu Nakajima, 2004. "Measuring Firmsâ€™ R&D Effects on Technical Progress: Japan in the 199," Econometric Society 2004 Far Eastern Meetings 414, Econometric Society.
- 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, vol. 21(2), pages 69-92, August.
- Flora Bellone & Jérémy Mallen-Pisano, 2013. "Is Misallocation Higher in France than in the United States?," GREDEG Working Papers 2013-38, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
- Flora Bellone & Patrick Musso & Michel Quéré & Lionel Nesta, 2006.
"Productivity and Market Selection of French Manufacturing Firms in the Nineties,"
Revue de l'OFCE,
Presses de Sciences-Po, vol. 97(5), pages 319-349.
- 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).
- Lionel Nesta & Flora Bellone & Patrick Musso & Michel Quéré, 2006. "Productivity and Market Selection of French Manufacturing Firms in the Nineties," Sciences Po publications 2006-04, Sciences Po.
- Flora Bellone & Patrick Musso & Michel Quéré & Lionel Nesta, 2006. "Productivity and market selection of french manufacturing firms in the nineties," Sciences Po publications info:hdl:2441/7185, Sciences Po.
- Kozo Kiyota & Tetsuji Okazaki, 2005.
"Foreign Technology Acquisition Policy and Firm Performance in Japan, 1957-1970: Micro-aspects of Industrial Policy,"
CIRJE-F-329, CIRJE, Faculty of Economics, University of Tokyo.
- Kiyota, Kozo & Okazaki, Tetsuji, 2005. "Foreign technology acquisition policy and firm performance in Japan, 1957-1970: Micro-aspects of industrial policy," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 563-586, September.
- Sebastien Lechevalier, 2007.
"The diversity of Capitalism and Heterogeneity of Firms - A Case Study of Japan during the Lost Decade,"
- Sébastien Lechevalier, 2007. "The Diversity of Capitalism and Heterogeneity of Firms - A Case Study of Japan during the Lost Decade," Post-Print halshs-00370523, HAL.
- Kozo Kiyota & Tetsuji Okazaki, 2004. "Foreign Technology Acquisition Policy and Firm Performance in Japan, 1957-1970: The Japanese Industrial Policy Revisited (Published in "International Journal of Industrial Organization", Sep," CARF F-Series CARF-F-003, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
- repec:hal:journl:halshs-00140624 is not listed on IDEAS
- Kozo Kiyota & Tetsuji Okazaki, 2004. "Foreign Technology Acquisition Policy and Firm Performance in Japan, 1957-1970: The Japanese Industrial Policy Revisited," CIRJE F-Series CIRJE-F-274, CIRJE, Faculty of Economics, University of Tokyo.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CIRJE administrative office).
If references are entirely missing, you can add them using this form.