TY - JOUR
T1 - Does the natural selection mechanism still work in severe recessions?
T2 - Examination of the Japanese economy in the 1990s
AU - Nishimura, Kiyohiko G.
AU - Nakajima, Takanobu
AU - Kiyota, Kozo
N1 - Funding Information:
We are grateful to Robert Stern, Sandra Heisig, and the referees of this Journal for helpful comments and useful suggestions. We also thank the Japan Society for the Promotion of Science for its financial support However, the views expressed here are strictly personal and in no way represent those of MMRC, JSPS, Yokohama National University, Keio University, ESRI, or the University of Tokyo. The order of the authors is intentionally reverse-alphabetic.
PY - 2005/9
Y1 - 2005/9
N2 - This paper investigates whether the natural selection mechanism (NSM) of economic Darwinism works in severe recessions. Based on micro data, we constructed a comprehensive firm-level panel dataset for Japan from 1994 to 1998 to analyze a firm's entry, survival, and exit and its relationship with TFP. Empirical results show that efficient firms in terms of TFP exited while inefficient ones survived in the banking-crisis period of 1996-1997. Further, this phenomenon is observed mainly for new entrants and contributes substantially to a fall in macro TFP after 1996. These facts strongly suggest a malfunctioning of NSM in severe recessions.
AB - This paper investigates whether the natural selection mechanism (NSM) of economic Darwinism works in severe recessions. Based on micro data, we constructed a comprehensive firm-level panel dataset for Japan from 1994 to 1998 to analyze a firm's entry, survival, and exit and its relationship with TFP. Empirical results show that efficient firms in terms of TFP exited while inefficient ones survived in the banking-crisis period of 1996-1997. Further, this phenomenon is observed mainly for new entrants and contributes substantially to a fall in macro TFP after 1996. These facts strongly suggest a malfunctioning of NSM in severe recessions.
KW - Enterprise census
KW - Entry and exit
KW - TFP
UR - http://www.scopus.com/inward/record.url?scp=26044466753&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=26044466753&partnerID=8YFLogxK
U2 - 10.1016/j.jebo.2004.03.008
DO - 10.1016/j.jebo.2004.03.008
M3 - Article
AN - SCOPUS:26044466753
VL - 58
SP - 53
EP - 78
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
SN - 0167-2681
IS - 1
ER -