IMF Working Papers

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

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

September 4, 2020

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Gee Hee Hong, Arata Ito, Yukiko Umeno Saito, and Anh Thi Ngoc Nguyen. Structural Changes in Japanese Firms: Business Dynamism in an Aging Society, (USA: International Monetary Fund, 2020) accessed December 4, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Aging, Demographic change, Economic sectors, External debt, Interest payments, Manufacturing, Population and demographics, Small and medium enterprises

Keywords: Aging, Business succession, Consumer company, Demographic change, Exit rate, Exit type, Firm exits, Firm growth, Global, Interest payments, Inter-firm-network, Manufacturing, Partner company, Population aging, Respondent firm, Small and medium enterprises, Transaction network, WP, Zombie firm, Zombie firms

Publication Details

  • Pages:

    39

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

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  • Series:

    Working Paper No. 2020/182

  • Stock No:

    WPIEA2020182

  • ISBN:

    9781513556338

  • ISSN:

    1018-5941