Structural Changes in Japanese Firms: Business Dynamism in an Aging Society
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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. 2020/182
Subject:
Aging Demographic change Economic sectors External debt Interest payments Manufacturing Population and demographics Small and medium enterprises
Frequency:
regular
English
Publication Date:
September 4, 2020
ISBN/ISSN:
9781513556338/1018-5941
Stock No:
WPIEA2020182
Pages:
39
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