Employment protection and productivity: evidence from firm-level panel data in Japan

Recent developments in the literature on Employment Protection Legislation (EPL) have revealed that changing the stringency of employment protection can lead to extensive consequences outside the labour market, by affecting firms’ production decisions or workers’ commitment levels. This article provides the first empirical evaluation of the comprehensive effect of restrictions on firing employees in Japan, by exploiting the variations in court decisions. We find that judgements lenient to workers significantly reduce firms’ total-factor productivity growth rate. The effect on capital is mixed and inconclusive, although we obtain modest evidence that an increase in firing costs induces a negative scale effect on capital inputs.     

Cell Production and Workplace Innovation in Japan: Toward a New Model for Japanese Manufacturing?

This article investigates the current trend toward cell production and other workplace innovations in Japan using a large–scale sampling survey of manufacturing firms and in–depth interviews with four leading electrical and electronic establishments. The quantitative analysis reveals the correlation between the use of cell production and the ratio of female to male workers and production strategy variables, as well as the positive effect of cell production on operating profit rates and ordinary profit rates. The case studies reveal the following points: First, processes and organizations have been decentralized to the degree that individual workshops move toward taking primary responsibility for customer relations, production decisions, and delivery. Corporate headquarters increasingly play a coordinating rather than decision–making role. Second, firms have steadily implemented make–to–order systems by tightening links to suppliers and customers and developing new inventory and cost–control systems. Third, firms have started to implement more performance–based personnel practices. However, considerable variance among firms is observed in complementary changes, particularly personnel innovations.     

A positive vision for the forerunner economies in the present global context

In this paper, the normative content of the concept of GNP growth is questioned, challenging the welfare implications of the traditional notions of input and output. It is argued that the attainment of sustainable development requires a reorientation towards a qualitative rather than quantitative framework of analysis.     

International Transmission of the 2007–2009 Financial Crisis: Evidence from Japan

We investigate the international transmission of the 2007–2009 financial crisis to Japanese firms by examining both stock returns and changes in operating performance during the crisis. Our results indicate that Japanese firms were affected by the crisis mainly through the trade channel in both stock returns and changes in operating performance. We also find that the liquidity channel played a role in the fall of stock returns in response to the crisis and in the changes in return on assets during the first year of the crisis. We obtain weak evidence for the credit crunch channel and no evidence to support the trade finance channel.