## Productivity Drag from Small and Medium-Sized Enterprises in Japan

_IMF Working Papers, July 1, 2019_

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**Canonical URL:** [Productivity Drag from Small and Medium-Sized Enterprises in Japan](https://www.imf.org/en/publications/wp/issues/2019/07/01/productivity-drag-from-small-and-medium-sized-enterprises-in-japan-46951)

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## Bibliographic details
- Authors: Mariana Colacelli, Gee Hee Hong
- Published: July 1, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498317474.001

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### Summary
- Productivity growth in Japan, as in most advanced economies, has moderated.
- The paper finds supportive evidence for the important role of small and medium-sized enterprises (SMEs) in explaining Japan’s modest productivity growth.
- Results show a substantial dispersion in firm-level productivity growth across sectors and even across firms within the same sector.
- SMEs, on average, exhibit lower productivity growth than non-SMEs in Japan, with smaller and older SMEs showing particularly low productivity growth.

### Key findings and quantitative estimate
- Substantial dispersion in firm-level productivity growth across sectors and within sectors.
- SMEs exhibit lower productivity growth than non-SMEs on average.
- Smaller SMEs show particularly low productivity growth.
- Older SMEs show particularly low productivity growth.
- Estimates suggest that boosting productivity growth in all of the worst-performing SMEs could improve overall productivity growth by up to 1.8 percentage points.

### Identified contributors to slow SME productivity growth
- The SME credit guarantee system.
- SME financing constraints.
- Demographic factors.
- Lack of intangible capital investment.

### Subject and keywords (as presented)
- Subject: Economic sectors, Intangible capital, Labor productivity, National accounts, Production, Productivity, Small and medium enterprises
- Keywords: exit rate, financing constraint, firm, Firm Dynamics, Global, Intangible capital, Intangible Investment, Labor productivity, laggard SME, Productivity, productivity growth, sluggish SME productivity growth, Small and medium enterprises, Small and Medium-Sized Enterprises, SME, SME business manager succession, SME characteristic, SME credit guarantee program, SME credit guarantee system, SME firm, SME guarantee, SMEs Labor Productivity Growth, WP

*Mariana Colacelli, and Gee Hee Hong. "Productivity Drag from Small and Medium-Sized Enterprises in Japan", IMF Working Papers 2019, 137 (2019), accessed 9/17/2026, https://doi.org/10.5089/9781498317474.001*

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_Source: https://www.imf.org/en/publications/wp/issues/2019/07/01/productivity-drag-from-small-and-medium-sized-enterprises-in-japan-46951_