The Evolution of the Productivity Dispersion of Firms - A Reevaluation of Its Determinants in the Case of Japan

RIETI Discussion Paper Series, 08-E-014, 2008

39 Pages Posted: 27 Mar 2018

See all articles by Keiko Ito

Keiko Ito

Senshu University - School of Economics

Sebastien Lechevalier

Ecole des Hautes Etudes en Sciences Sociales (EHESS)

Date Written: March 22, 2018

Abstract

There is a growing body of literature analyzing empirically the evolution of productivity dispersion at the firm level and its determinants. This paper contributes to this literature by investigating the case of Japanese firms during the so-called “Lost Decade” (1992- 2005), which is still under-analyzed. We use a firm-level panel dataset taken from a large-scale administrative survey, the Basic Survey of Japanese Business Structure and Activities (BSBSA) for the years 1994-2003. Our results can be summarized as follows. First, we confirm that there was an overall increase in both labor productivity and total factor productivity dispersion, especially in the manufacturing sector from 1998 onward. Second, in the case of Japanese firms during the Lost Decade, and contrary to what has been found for some other countries, we find no significant impact of the introduction of information and communication technologies (ICT) on productivity dispersion. On the other hand, we do find evidence of a significant and positive impact of internationalization on productivity dispersion. In addition, the evolution of the competitive environment appears to play a role: we find that the increase in the Hershman-Herfindahl index observed in some sectors, which characterizes a more oligopolistic environment, is associated with an increase in productivity dispersion.

Suggested Citation

Ito, Keiko and Lechevalier, Sebastien, The Evolution of the Productivity Dispersion of Firms - A Reevaluation of Its Determinants in the Case of Japan (March 22, 2018). RIETI Discussion Paper Series, 08-E-014, 2008, Available at SSRN: https://ssrn.com/abstract=3146990 or http://dx.doi.org/10.2139/ssrn.3146990

Keiko Ito

Senshu University - School of Economics ( email )

Kanagawa 214-8580
Japan

Sebastien Lechevalier (Contact Author)

Ecole des Hautes Etudes en Sciences Sociales (EHESS) ( email )

54, boulevard Raspail
Paris, 75006
France

HOME PAGE: http://https://sebastienlechevalier.wordpress.com/

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