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The Shadow of Death: Pre-exit Performance of Firms in Japan

  • Kozo Kiyota
  • Miho Takizawa

This paper examines the pre-exit productivity performance and asks how productivity affects future survival, controlling for firm size and unobserved firm heterogeneity. Based on firm-level data in Japan for 1995-002, we found that firms did not face "sudden death" but there was a "shadow of death." Future exiting firms had lower performance five years before their exit. Moreover, unobserved firm heterogeneity had a statistically significant effect on firm survival analysis. However, we also found that the effects of unobserved heterogeneity were not very large and thus did not reverse the conclusion.

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File URL: http://www.rieti.go.jp/jp/publications/dp/06e033.pdf
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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 06033.

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Length: 19 pages
Date of creation: Aug 2006
Date of revision:
Handle: RePEc:eti:dpaper:06033
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