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

Author/Editor:

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

Publication Date:

September 4, 2020

Electronic Access:

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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.

Series:

Working Paper No. 20/182

Frequency:

regular

English

Publication Date:

September 4, 2020

ISBN/ISSN:

9781513556338/1018-5941

Stock No:

WPIEA2020182

Format:

Paper

Pages:

39

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