Do SMEs and Zombie firms cause the stagnation of the Japanese economy? ～Cross-country evidence from Japan and five European countries～
##article.authors##
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yoshiyuki KITANO
Graduate School of Economics, Kobe University
https://researchmap.jp/yoshi_54
- yoshiaki SHIMIZU Graduate School of Economics, Kobe University
DOI:
https://doi.org/10.51094/jxiv.1015Keywords:
SMEs, Zombie, Total Factor Productivity, Investment, EmploymentAbstract
We examine the effects of Small and Medium-sized Enterprises (SMEs) and Zombie firms on productivity across industries using multinational (Japan, France, Germany, Italy, Spain, and the U.K.) corporate financial data for 2011-2019. Our empirical results first show that, while Zombie firms have negative and statistically significant effects on productivity, the ratio of the number of Zombie firms and the Zombie asset ratio in each country shows a declining trend. Second, we demonstrate that the effects on Non-Zombie firms were negative for the number of employees. Third, we find only Japan’s total factor productivity (TFP) level shows positive and statistically significant effects, and a widening gap in productivity between Zombie and Non-Zombie firms. Finally, regarding the barriers to entry for new businesses caused by the retention of Zombie firms, a larger gap in the TFP level was identified for young firms in Japan, indicating possible negative impacts on business startups.
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Published: 2025-01-15 01:01:39 UTC
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yoshiyuki KITANO
yoshiaki SHIMIZU
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