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Structural Changes in Japanese Firms: Business Dynamism in an Aging Society
Author:
Mr. Gee Hee Hong null

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Arata Ito null

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Yukiko Umeno Saito null

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Anh Thi Ngoc Nguyen null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2020: Issue 182
Language:
English
Publication Date:
04 Sep 2020
DOI:
https://doi.org/10.5089/9781513556338.001
ISBN:
9781513556338
ISSN:
1018-5941
Pages:
39
Keywords:
WP; zombie firm; exit rate; partner company; consumer company; transaction network; exit type; respondent firm; Aging; Small and medium enterprises; Manufacturing; Interest payments; Demographic change; Global; firm growth; business succession; population aging; firm exits; inter-firm-network; zombie firms
Legal-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.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund