Are Japanese companies less risky and less profitable than US companies? Evidence from a matched sample

Jiangtao Fu and Yoshiaki Ogura

Japan and the World Economy, 2019, vol. 51, issue C, -

Abstract: We reexamine the differences in the profitability distributions of listed companies in the United States and Japan. To control for cross-country differences in the industrial composition, firm size, and firm age distribution, we construct a matched sample using Mahalanobis nearest neighbor matching with respect to these factors. The matched sample supports the finding of existing studies that the median and the standard deviation of profitability are significantly higher in the United States than in Japan. Our matched panel data indicate that this difference arises from both larger firm heterogeneity and more intensive risk-taking in the United States. The sector-by-sector analysis shows that the standard deviation gap is larger in the sectors with more intensive churning in asset-size ranking.

Keywords: Risk-Taking; Allocative efficiency; Firm heterogeneity (search for similar items in EconPapers)
JEL-codes: G32 G38 L25 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0922142519300271
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:51:y:2019:i:c:5

DOI: 10.1016/j.japwor.2019.100960

Access Statistics for this article

Japan and the World Economy is currently edited by Robert Dekle and Yasushi Hamao

More articles in Japan and the World Economy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().