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Efficiency of small and medium-sized real estate industry -An analysis on the period after the burst of the bubble economy using micro-data

Author

Listed:
  • Yasuo Goto

    (Faculty of Social Innovation, Seijo University)

Abstract

The real estate industry is a typical industry that suffered the most damage from the bursting of the bubble economy in Japan and seems to have not yet completely recovered from the severe situation overall. In this article we analyse the industry using comprehensive database which incorporate huge number of small and medium-sized enterprises. We confirmed that the real estate industry as a whole is not in a bad situation, but that the smallest tiers are performing poorly. It can be interpreted as not because of the large number of inefficient firms, but because of the high degree of inefficiency, in terms of inefficiency of firms which is evaluated with the criteria for “zombie†firm in this article. The average profit margin of SMEs in the real estate industry is relatively low, however, the proportion of zombie firms is not necessarily high. The problem is not the ratio of the number of zombies but the performance of zombies in the smallest class. In the real estate industry, relatively large-scale class generally has become out of the post-bubble situation. Improving the profitability of the smallest tier seems to be an unavoidable challenge for improving the performance of the industry as a whole.

Suggested Citation

  • Yasuo Goto, 2021. "Efficiency of small and medium-sized real estate industry -An analysis on the period after the burst of the bubble economy using micro-data," KIER Working Papers 1059, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:1059
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    References listed on IDEAS

    as
    1. Ricardo J. Caballero & Takeo Hoshi & Anil K. Kashyap, 2008. "Zombie Lending and Depressed Restructuring in Japan," American Economic Review, American Economic Association, vol. 98(5), pages 1943-1977, December.
    2. Shin‐ichi Fukuda & Jun‐ichi Nakamura, 2011. "Why Did ‘Zombie’ Firms Recover in Japan?," The World Economy, Wiley Blackwell, vol. 34, pages 1124-1137, July.
    3. Joe Peek & Eric S. Rosengren, 2005. "Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan," American Economic Review, American Economic Association, vol. 95(4), pages 1144-1166, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    firm dynamics; zombie firm; profit margin; bubble economy; small and medium-sized enterprises (SMEs); size-dependent policy;
    All these keywords.

    JEL classification:

    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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