Competition and Productivity in Japanese Manufacturing Industries

Yosuke Okada

NBER Working Paper No. 11540
Issued in August 2005
NBER Program(s):   PR

This paper examines the determinants of productivity in Japanese manufacturing industries, looking particularly at the impact of product market competition on productivity. Using a newly available panel data on around ten thousand firms in Japanese manufacturing for the years 1994-2000, I show that competition, as measured by lower level of industrial price-cost margin, enhances productivity growth, controlling for a broad range of industrial and firm-specific characteristics. Moreover, I suggest that market power, as measured by either individual firm’s price-cost margin or market share, has negative impact on productivity level of R&D performing firms.

(1095 K)

Published: Okada, Yosuke. "Competition And Productivity In Japanese Manufacturing Industries," Journal of the Japanese and International Economies, 2005, v19(4,Dec), 586-616.

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