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Productivity Drag from Small and Medium-Sized Enterprises in Japan
Author:
Mariana Colacelli null

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Mr. Gee Hee Hong null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2019: Issue 137
Language:
English
Publication Date:
01 Jul 2019
DOI:
https://doi.org/10.5089/9781498317474.001
ISBN:
9781498317474
ISSN:
1018-5941
Pages:
21
Keywords:
WP; productivity growth; firm; SME; SMEs Labor Productivity Growth; Productivity; Firm Dynamics; Small and Medium-Sized Enterprises; Intangible Investment; SME credit guarantee system; financing constraint; SME firm; SME business manager succession; SME credit guarantee program; SME guarantee; laggard SME; exit rate; SME characteristic; sluggish SME productivity growth; Labor productivity; Small and medium enterprises; Intangible capital; Global
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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.
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Productivity growth in Japan, as in most advanced economies, has moderated. This 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. 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. The SME credit guarantee system, SME financing constraints, demographic factors, and lack of intangible capital investment are discussed as contributors to the slow productivity growth of Japan’s small and old SMEs.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund