TY  - JOUR
AU  - Okada,Tae
AU  - Horioka,Charles Yuji
TI  - A Comment on Nishimura, Nakajima, and Kiyota's "Does the natural selection mechanism still work in severe recessions?  Examination of the Japanese economy in the 1990s"
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13298
PY  - 2007
Y2  - August 2007
UR  - http://www.nber.org/papers/w13298
L1  - http://www.nber.org/papers/w13298.pdf
N1  - Author contact info:
Tae Okada
Institute of Social and Economic Research
Osaka University
6-1, Mihogaoka, Ibaraki, Osaka 567-0047
JAPAN
Tel: 81-6-6877-5111
Fax: 81-6-6878-2766
E-Mail: tokada@iser.osaka-u.ac.jp

Charles Y. Horioka
Institute of Social and Economic Research
Osaka University
6-1 Mihogaoka, Ibaraki-shi
Osaka-fu 567-0047
JAPAN
Tel: 81-6-6879-8586
Fax: 81-6-6878-2766
E-Mail: horioka@iser.osaka-u.ac.jp
AB  - Nishimura et al. (2005) analyze the entry/exit behavior of Japanese firms during the 1990s and find that relatively efficient firms exited while relatively inefficient firms survived during the banking-crisis period of 1996-97.  They conclude that the natural selection mechanism (NSM) apparently malfunctions during severe recessions, but we offer a more plausible interpretation: NSM continued to function effectively even during this period, but aberrant banking practices caused a shift in the type of natural selection from directional to disruptive selection, with the most efficient as well as the least efficient firms being favored and firms of intermediate efficiency being selected against.
ER  -