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Voluntary firm exits and inter-firm transaction networks in an ageing society

Author

Listed:
  • Kongphop Wongkaew

    (Waseda University)

  • Yukiko Umeno Saito

    (Waseda University
    Research Institute of Economy, Trade and Industry (RIETI))

Abstract

This study investigates voluntary firm exits, focusing on the role of partner exits within inter-firm transaction networks in ageing Japan. Utilising comprehensive firm-level data covering over one million Japanese firms from 2007 to 2022, we find that firms led by older CEOs exhibit higher voluntary exit rates and more long-lasting inter-firm relationships. Further, one firm’s voluntary exit significantly correlates with voluntary exits by business partners, and this is particularly pronounced in peripheral regions characterised by sparse networks, where firms have fewer opportunities to form new partnerships. Accordingly, relationship stickiness is a crucial factor intensifying the difficulties firms face when adapting to partner exits.

Suggested Citation

  • Kongphop Wongkaew & Yukiko Umeno Saito, 2025. "Voluntary firm exits and inter-firm transaction networks in an ageing society," The Japanese Economic Review, Springer, vol. 76(4), pages 927-955, October.
    • Handle: RePEc:spr:jecrev:v:76:y:2025:i:4:d:10.1007_s42973-025-00216-6
    DOI: 10.1007/s42973-025-00216-6
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    Keywords

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    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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