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Product Switching and Firm Performance in Japan

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  • KAWAKAMI Atsushi
  • MIYAGAWA Tsutomu

Abstract

Following Bernard, Redding and Schott (2010), we have constructed product and firm level data on Japanese manufacturing firms using the Census of Manufactures. Employing this data, we have found that multiple-product firms show better performance than single-product firms and product switching behavior in incumbent firms leads to greater output growth in the Japanese manufacturing sector, more so than in entry and exit. Empirical studies at industry level show that an unregulated, competitive environment stimulates product switching. At firm level, labor productivity growth and an unregulated, competitive environment encourage product switching behavior. Such product switching behavior improves firm performance in the areas of output, employment and labor productivity, etc.

Suggested Citation

  • KAWAKAMI Atsushi & MIYAGAWA Tsutomu, 2010. "Product Switching and Firm Performance in Japan," Discussion papers 10043, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:10043
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    References listed on IDEAS

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    Cited by:

    1. MIYAGAWA Tsutomu & ISHIKAWA Takayuki, 2019. "On the Decline of R&D Efficiency," Discussion papers 19052, Research Institute of Economy, Trade and Industry (RIETI).
    2. Robert DEKLE & KAWAKAMI Atsushi & KIYOTAKI Nobuhiro & MIYAGAWA Tsutomu, 2015. "Product Dynamics and Aggregate Shocks: Evidence from Japanese product and firm level data," Discussion papers 15137, Research Institute of Economy, Trade and Industry (RIETI).
    3. Nakhoda, Aadil, 2012. "The effect of foreign competition on product switching activities: A firm level analysis," MPRA Paper 39167, University Library of Munich, Germany.
    4. Kozo Kiyota & Toshiyuki Matsuura & Yoshio Higuchi, 2020. "Multinationals, intra‐firm trade and employment volatility," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 982-1015, August.
    5. KAWAKAMI Atsushi & MIYAGAWA Tsutomu & TAKIZAWA Miho, 2011. "Revisiting Productivity Differences and Firm Turnover: Evidence from product-based TFP measures in the Japanese manufacturing industries," Discussion papers 11064, Research Institute of Economy, Trade and Industry (RIETI).
    6. NISHITATENO Shuhei, 2015. "Market Structure and Entry: Evidence from the intermediate goods market," Discussion papers 15081, Research Institute of Economy, Trade and Industry (RIETI).
    7. Elliott, Robert & Sun, Puyang & Zhu, Tong, 2019. "Electricity prices and industry switching: Evidence from Chinese manufacturing firms," Energy Economics, Elsevier, vol. 78(C), pages 567-588.
    8. MIYAGAWA Tsutomu & EDAMURA Kazuma & KAWAKAMI Atsushi, 2017. "R&D and Product Dynamics," Discussion papers 17101, Research Institute of Economy, Trade and Industry (RIETI).
    9. MORIKAWA Masayuki, 2013. "Business Restructuring of Japanese Firms: Structural changes during the "Lost Decades"," Discussion papers 13083, Research Institute of Economy, Trade and Industry (RIETI).

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