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Globalisation, Multinationals and Productivity in Japan’s Lost Decade

Author

Listed:
  • Tomohiko Inui
  • Richard Kneller
  • Toshiyuki Matsuura
  • Danny McGowan

Abstract

Myriad hypotheses have been advanced to explain the dismal performance of the post-1990 Japanese economy. In this paper we use plant and firm data to investigate the issue. The low rate of productivity growth in Japan is also often seen as a product of Japanese MNEs offshoring production and shutting plants that are relative to others in their industry, high productivity. We find that this is true, plants shut by MNEs are relatively more productive than the industry average, but they are generally weaker elements of the MNE more generally. This behaviour is also not distinct to MNEs. Our analysis suggests that the rate of productivity growth within firms is also partly a consequence of low entry and exit rates. Generally we find that the determinants of productivity change are similar to those found for other countries, but that productivity improvement is lower in industries in which globalisation is higher. The low rate of entry and exit in Japan therefore means that this affects more firms than would otherwise have been the case.

Suggested Citation

  • Tomohiko Inui & Richard Kneller & Toshiyuki Matsuura & Danny McGowan, 2010. "Globalisation, Multinationals and Productivity in Japan’s Lost Decade," Discussion Papers 10/04, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:10/04
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    2. Mitsuo Inada & Yung-Hsing Guo, 2016. "Heterogeneous Impacts of a Change in Chinese FDI Regulations on Domestic Market Outcomes: Empirical Evidence from Taiwanese Plant Data," KIER Working Papers 934, Kyoto University, Institute of Economic Research.
    3. Pehr-Johan Norbäck & Ayça Tekin-Koru & Andreas Waldkirch, 2015. "Multinational Firms and Plant Divestiture," Review of International Economics, Wiley Blackwell, vol. 23(5), pages 811-845, November.
    4. Richard Kneller & Danny McGowan & Tomohiko Inui & Toshiyuki Matsuura, 2012. "Closure within multi-plant firms: evidence from Japan," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(4), pages 647-668, December.
    5. Marta Bisztray, 2016. "The effect of foreign-owned large plant closures on nearby firms," CERS-IE WORKING PAPERS 1623, Institute of Economics, Centre for Economic and Regional Studies.
    6. Min, Byung S. & Smyth, Russell, 2014. "Corporate governance, globalization and firm productivity," Journal of World Business, Elsevier, vol. 49(3), pages 372-385.
    7. Toshihiro OKUBO, 2021. "Foreign Direct Investment in China and Domestic Activities of Japanese Firms," Discussion papers 21023, Research Institute of Economy, Trade and Industry (RIETI).
    8. Tomohiko INUI & Naomi KODAMA, 2016. "The Effects of Japanese Customer Firms' Overseas Outsourcing on Supplier Firms' Performance," Discussion papers 16106, Research Institute of Economy, Trade and Industry (RIETI).
    9. Ioannis Bournakis & Sushanta Mallick & David Kernohan & Dimitris A.Tsouknidis, 2013. "Measuring Firm-Level Productivity Convergence in the UK: The Role of Taxation and R&D Investment," Working Papers 45, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.

    More about this item

    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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