WHY DID JAPAN'S TFP GROWTH SLOW DOWN IN THE LOST DECADE? AN EMPIRICAL ANALYSIS BASED ON FIRM‐LEVEL DATA OF MANUFACTURING FIRMS*

Kyoji Fukao and Hyeog Ug Kwon

The Japanese Economic Review, 2006, vol. 57, issue 2, 195-228

Abstract: This study analyses the cause of the slowdown in Japan's TFP growth during the 1990s. Many preceding studies, examining the issue at the macro‐ or industry‐level, have found that the slowdown was primarily due to the stagnation in TFP growth in the manufacturing sector. Using firm level panel data covering the entire sector, we investigate the causes of the TFP slowdown and find that the reallocation of resources from less efficient to more efficient firms was very slow and limited. This “low metabolism” seems to be an important cause for the slowdown in Japan's TFP growth.

Date: 2006
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https://doi.org/10.1111/j.1468-5876.2006.00359.x

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Working Paper: Why Did Japan's TFP Growth Slow Down in the Lost Decade? An Empirical Analysis Based on Firm-Level Data of Manufacturing Firms (2005)
Working Paper: Why Did Japan's TFP Growth Slow Down in the Lost Decade?: An Empirical Analysis Based on Firm-Level Data of Manufacturing Firms (2004)
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