Plant Exit and Productivity Performance: Evidence from Japan

We find that plant and firm characteristics are the main determinants of plant exit; industry variables tend to have a peripheral impact. Large, capital intensive and productive plants are less susceptible to exit while high wage plants are more vulnerable. Multinational ownership increases the likelihood of exit, though only among domestic multinationals. Within multi-plant firms, plant features relative to the firm average are important determinants of exit. The evidence suggests that globalisation, through the offshoring of productive plants to low-wage countries, has not been responsible for the lack of productivity growth in Japan. Rather this has been a consequence of poor within plant productivity growth. 1. Nihon University 2. University of Nottingham and Leverhulme Centre for Research in Globalisation and Economic Policy 3. Hitotsubashi University and RIETI 4. Corresponding author. University of Nottingham and Leverhulme Centre for Research in Globalisation and Economic Policy