Structural Changes in Japanese Firms: Business Dynamism in an Aging Society

Gee Hee Hong, Arata Ito, Yukiko Saito and Anh Thi Ngoc Nguyen

No 2020/182, IMF Working Papers from International Monetary Fund

Abstract: The COVID-19 pandemic has posed a serious threat to the survival of Japanese firms, highlighting the importance of understanding how and why firms exit. In this paper, we use a rich firm-level dataset of Japanese firms to document how firm exit patterns have evolved between 2007 and 2017. Firm exit patterns have been heavily influenced by Japan’s demographic trends, as a majority of exits in recent years were voluntary exits of firms (business closures) owned by CEOs aged 65 years or older without business successors. In contrast to this increase in voluntary exits, other “traditional” firm exits (such as bankruptcies), have declined. These findings underscore the importance of addressing business transition issues in a rapidly aging society.

Keywords: WP; zombie firm; exit rate; partner company; consumer company; transaction network; exit type; respondent firm; Aging; Small and medium enterprises; Manufacturing; Interest payments; Demographic change; Global; firm growth; business succession; population aging; firm exits; inter-firm-network; zombie firms (search for similar items in EconPapers)
Pages: 39
Date: 2020-09-04
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Citations: View citations in EconPapers (7)

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