����������������������� ������������������������������������������������������ ������

���

1996 2001

262 50%

19

JEL Classification: F23, L11, L20

Key Words:

15

2004 2 2

( kwon@eco.nihon-u.ac.jp) (keiko-i@isc.senshu-u.ac.jp) ( k.fukao@srv.cc.hit-u.ac.jp)

2

Foreign-Owned Establishments in Japan: An Empirical Analysis of Exit and

Employment Growth Based on the Establishment and Enterprise Census

By Hyeog Ug Kwon, Keiko Ito, Kyoji Fukao

Abstract

Using micro-data of the Establishment and Enterprise Census, we compile new statistics on the

employment of Japanese affiliates of foreign firms and of domestically-owned establishments at the

3-digit industry level for the years 1996 and 2001 and explore the determinants of exit and

employment growth for establishments in Japan. The number of workers employed by

domestically-owned establishments decreased by 2.6 million between 1996 and 2001, while the

number of workers employed by establishments majority-owned by foreigners increases by 0.2

million during the same period. The largest part of the increase in the employment in foreign-owned

establishment is attributable to the increase in the service sector. We also find that the entry and exit

rates of foreign-owned establishments are higher than those of domestically-owned establishments.

Furthermore, we estimate an empirical model explaining the determinants of exit. The results

indicate that the probability of exit is significantly higher for foreign-owned establishments even

when controlling for establishment size, age, and industry characteristics. Possible explanations of

this result are that foreign establishments are footloose or that they are more likely to fail. However,

in the regression analysis on employment growth for surviving establishments only, we find that

successful foreign-owned establishments grow more rapidly, even when controlling for

establishment size, age, and industry characteristics.

JEL Classification: F23, F11, L20

Keywords: Japanese affiliates of foreign firms, exit, employment growth, Establishment and

Enterprise Census

�����������

���

3

2003

Caves

1996)1

Bernard and Sjöholm (2003)

Görg and Strobl (2003)

2

2001 1994 97

2003

1994 98

2

3

1996 2001 3

1 1999 1990

2 Bernard and Jensen (2001)

3 Görg and Strobl (2003)

��������������

���

4

4

4

5

1996 2001

6

5

2001 2003

50 30007

4 1996 Ito and Fukao (2003, 2005) (2003)

5

15 2

32001

33.4 32.975.6

6 1992 97 U.S. Department of Commerce (2003) “Foreign Direct Investment in the United States: Establishment Data for 1997” 7

�����������

���

5

8, 9

(1)

(2)

1996

2001

(3)

5

50%

2001 20%

33.3%

50%

10

8

1996 10 1 850

2001 10 1 13 Ito and Fukao (2003 2005)2003 1996

1996 2001

9

200310 26

10

50

1996 10 33.3 33.42001 10 20

33.41/3

��������������

���

6

1996

33.3

2-1 19

0.77 2001

33.3

75.6 21.9

53.7 2-2 1996 2001

27.1 22.8

2001 6,016 1996

262 180 82

2001 1.26

1.26 5

1.6

50

50

1996 2001 50

26.6 51.3

50 24.4 43.5

1.9 1.8 11

33.3

1996 1.36 2001 1.97 224

251

7.21 15.49 4.72 10.82

11 2001 20 502001 50 20 50

161.32.68 65.8 95.5

5.91 2.0333.3 2001

1.26 5020 50

2.68 2.120 50

�����������

���

7

��������������

���

8

�����������

���

9

��������������

���

10

�����������

����

11

M&A

5

70.5

2001 10 5

84.5

2001 1996 5 55.3

10 73.8 5

10

33.3

1996 0.65 2001 1.14

3086 310 311

313 323 326 331 332

333 341 342

344 1990

12

10

69.9 2001

10

10 1996

70.7

12 2-3 2-4

1996 2001 1996

��������������

����

12

1996 2001

1996 2001

2-3 2-4

13 2-3 1996

1996 2001 2-3 1996

50

5,687

0.21

0.45% 1 33.7

15.814 5

1996 38.8 104.8

3,410 1996

60.0 15

13 3

14 2004 A2 H8100 5 6 100

0.9B1 H8 500 4

500 0.4 B21996 B2 H8

15 18 2001 B2 H13 19 2815

�����������

����

13

1996 31.6 13.5

42.0 206

40.2

61.7

2004: p.153

96 36.0

47.7 2-3

16

2001 2-4

2001 50

12,807

0.48

1.07 1996

1996 6,751 2001

52.7 1996

1,176,623 44.1

2001

16

8 13 813

��������������

����

14

1996 16.3 6.3

32.1 213

49.1 53.8

2-4 1996 2001

1996 2001

49.18

-2.73

1990

�����������

����

15

��������������

����

16

�����������

����

17

��������������

����

18

�����������

����

19

1996 2001

Dunne, Roberts and

Samuelson (1989)

Hopenhayn (1992)

Jovanovic (1982) heterogeneous

2

1

2

Whinston (1988

Dunne, Roberts and Samuelson (1989)

3

3

4

��������������

����

20

(Gibrat law)

17 Jovanovic (1982)

2

5

6

Dunne, Roberts, and

Samuelson (1989)

7

200318

17 Lotti, Santarelli, and Vivarelli(2003)18 2003 Fukao, Ito, and Kwon (2005)

2003 1994 97 Fukao, Ito, and Kwon (2005) 1994 2000

1990 Fukao, Ito, and Kwon

�����������

����

21

8

1 8 1

2

iiii ZXEXIT 11)Pr( 1

iiii ZXEMPLOYMENT 22ln 2

1 EXITi i 1996 2001 1

0 2 lnEMPLOYMENTi i

1996 2001

Xi Zi

i

Xi

1.

2. 1

1 1990 96 1 0

2 1985 89 1 0

3 1975 84 1 0

4 1965 74 1 0

5 1955 64 1 0

6 1954 1 0

3. 1 0

4.

33.3 33.3 1 0

50 50 1 0

1 0

58

50

(2005) 1998 2003

��������������

����

22

58 50

1996 2001

33.3

8 1996

1997

1995

1995 4 1996 7

n

8 1996

1997

1992 2000 43

1997

1992 2000 7

1995

1995

1

3-1 3-2

2 3-3 3-4 19 1996

19 1 1996 2001

n(

�����������

����

23

2001 1 0

1996 2001

3-1 3-2

1

4

30 40 1965 74

30

1

2

��������������

����

24

�����������

����

25

3-3 3-4

20

Jovanovic (1982)

5 6

7

Markusen (1984)

multiplant economies

16

Oliveira and Fortunato (2003)

5

20 2

1 100

��������������

����

26

�����������

����

27

��������������

����

28

1996 2001

262 50%

19

Görg and Strobl (2003)

Görg

and Strobl (2003)

Görg and Strobl (2003)

21

2001 2003

2003

2003

21 Cox Cox 1972

Audretsch (1995), Audretsch and Mahmood (1995) Bernard and Sjoholm (2003) Görg and Strobl (2003) 2001

�����������

����

29

22

2001

23

24 16

22

23

24

��������������

����

30

Audretsch, D. B. “Innovation, Growth and Survival,” International Journal of Industrial

Organization 1995, 13 (4), pp. 441-57.

Audretsch, D. B. and T. Mahmood “New-firm Survival: New Results Using a Hazard Function,”

Review of Economics and Statistics 1995, 77 (1), pp. 97-103.

Bernard, A. B. and J. B. Jensen “Who Dies? International Trade, Market Structure, and Industrial

Restructuring,” NBER Working Paper No. 8327, 2001.

Bernard, A. B. and F. Sjoholm “Foreign Owners and Plant Survival,” NBER Working Paper No.

10039, 2003.

Caves, R. E. Multinational Enterprise and Economic Analysis, 2nd edition, Cambridge, Cambridge

University Press, 1996.

Cox, D. R. “Regression Models and Life Tables,” Journal of the Royal Statistical Society Series B

1972, 34 (2), pp. 187-220.

Dunne, T., M. J. Roberts, and L. Samuelson “The Growth and Failure of Manufacturing Plants,”

Quarterly Journal of Economics 1989, 104(4), pp. 671-698.

Fukao, K., K. Ito, and H. U. Kwon “Do Out-In M&As Bring Higher TFP to Japan? An Empirical

Analysis Based on Micro-Data on Japanese Manufacturing Firms,” Journal of the

Japanese and International Economies 2005, 19, pp. 272-301.

Gorg, H. and E. Strobl “’Footloose’ Multinationals?” The Manchester School 2003, 71 (1), pp. 1-19.

Hopenhayn, H. A. “Entry, Exit, and Firm Dynamics in Long Run Equilibrium,” Econometrica 1992,

60(5), pp. 1127-1150.

Ito, K. and K. Fukao “Foreign Direct Investment in Japan: Empirical Analysis Based on

Establishment and Enterprise Census,” in Robert M. Stern ed., Issues and Options for

U.S.-Japan Trade Policies, Michigan: The University of Michigan Press, 2003.

Ito, K. and K. Fukao “Foreign Direct Investment and Trade in Japan: An Empirical Analysis Based

on the Establishment and Enterprise Census for 1996,” Journal of the Japanese and

International Economies 2005, 19, pp. 414-455.

Jovanovic, B. “Selection and Evolution of Industry,” Econometrica 1982, 50(3), pp. 649-670.

�����������

����

31

Lotti, F., E. Santarelli, and M. Vivarelli “Does Gibrat’s Law Hold among Young, Small Firms?,”

Journal of Evolutionary Economics 2003, 13(3), pp.213-235.

Markusen, J. R. “Multinationals, Multi-Plant Economies and the Gains from Trade,” Journal of

International Economics 1984, 16, pp. 205-226.

Oliveira, B. and A. Fortunato “Testing the Gibrat’s Law: an Empirical Evidence from a Panel of

Portuguese Manufacturing Firms,” GEMF Working Paper, 2003.

Whinston, M. D. “Exit with Multi-Plant Firms,” RAND Journal of Economics 1988, 19(4), pp.

568-588.

pp. 187-229

2003

1996, vol31 pp. 66-82

6 pp. 159-181 2003

pp. 4 -11 1999 6

1997 vol31

15

2004

2001 vol93(4) pp. 81-105

��������������

����

32

�����������

����

33

��������������

����

34

�����������

����

35

��������������

����