IDEAS home Printed from
   My bibliography  Save this paper

The Diversity of Capitalism and Heterogeneity of Firms - A Case Study of Japan during the Lost Decade


  • Sébastien Lechevalier

    () (CCJ - Chine, Corée, Japon - EHESS - École des hautes études en sciences sociales - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique)


Most institutional theories of the diversity of capitalism (at least implicitly) assume the existence of a representative firm in each type of capitalism. Based on a case study of Japan during the Lost Decade (1992-2005), this paper aims at showing that this assumption introduces severe drawbacks in the analysis of Japanese capitalism in crisis. After having proposed a survey of theories of Japanese capitalism and of its crisis, we assess the increasing heterogeneity of Japanese firms since the beginning of the 1990s, in terms of performances and “models”, and propose some explanations of this increasing heterogeneity, which concerns firms of similar size and belonging to the same sectors. We then propose an alternative interpretation of this crisis - the lack of coordination of an increasing heterogeneity - and argue that it requires a new characterization of Japanese capitalism. In the final part, we extend our analysis beyond the Japanese case in arguing that our framework, which is based on an alternative theory of the firm, on the study of the evolution of the heterogeneity of organizations, and on the analysis of aggregation and coordination of the micro behaviors through institutions, provides a more dynamic understanding of institutional change.

Suggested Citation

  • 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.
  • Handle: RePEc:hal:journl:halshs-00370523
    Note: View the original document on HAL open archive server:

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Nishimura, Kiyohiko G. & Nakajima, Takanobu & Kiyota, Kozo, 2005. "Does the natural selection mechanism still work in severe recessions?: Examination of the Japanese economy in the 1990s," Journal of Economic Behavior & Organization, Elsevier, vol. 58(1), pages 53-78, September.
    2. Hurlin, Christophe & Lechevalier, Sébastien, 2003. "The heterogeneity of employment adjustment across Japanese firms. A study using panel data," CEPREMAP Working Papers (Couverture Orange) 0310, CEPREMAP.
    3. Oi, Walter Y, 1983. "Heterogeneous Firms and the Organization of Production," Economic Inquiry, Western Economic Association International, vol. 21(2), pages 147-171, April.
    4. Masahiko Aoki, 2013. "Toward an Economic Model of the Japanese Firm," Chapters,in: Comparative Institutional Analysis, chapter 18, pages 315-341 Edward Elgar Publishing.
    5. Kyoji Fukao & Hyeog Ug Kwon, 2006. "Why Did Japan'S Tfp Growth Slow Down In The Lost Decade? An Empirical Analysis Based On Firm-Level Data Of Manufacturing Firms," The Japanese Economic Review, Japanese Economic Association, vol. 57(2), pages 195-228.
    6. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147, June.
    7. Aoki, Masahiko, 1989. "The nature of the Japanese firm as a nexus of employment and financial contracts: An overview," Journal of the Japanese and International Economies, Elsevier, vol. 3(4), pages 345-366, December.
    8. Kiyohiko G. Nishimura & Takanobu Nakajima & Kozo Kiyota, 2003. "Does Natural Selection Mechanism Still Work in Severe Recessions? -- ]Examination of the Japanese Economy in the 1990s ---," CIRJE F-Series CIRJE-F-222, CIRJE, Faculty of Economics, University of Tokyo.
    9. 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.
    10. Kozo Kiyota, 2006. "Reconsidering the Effects of Intranational and nternational R&D Spillovers on Productivity Growth: Firm-level Evidence from Japan," Discussion papers 06001, Research Institute of Economy, Trade and Industry (RIETI).
    11. Suzuki, Kazuyuki, 1993. "R&D spillovers and technology transfer among and within vertical keiretsu groups : Evidence from the Japanese electrical machinery industry," International Journal of Industrial Organization, Elsevier, vol. 11(4), pages 573-591.
    12. Nelson, Richard R, 1981. "Research on Productivity Growth and Productivity Differences: Dead Ends and New Departures," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 1029-1064, September.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Keiko Ito & Sébastien Lechevalier, 2009. "The evolution of the productivity dispersion of firms: a reevaluation of its determinants in the case of Japan," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 405-429, October.
    2. Sébastien Lechevalier, 2012. "The Japanese Firm," Chapters,in: Handbook on the Economics and Theory of the Firm, chapter 16 Edward Elgar Publishing.
    3. Hanappi, Hardy, 2013. "Money, Credit, Capital and the State: On the evolution of money and institutions," MPRA Paper 47166, University Library of Munich, Germany.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-00370523. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.