Employment Adjustment in Japanese Firms: Negative Profits and Dismissals

Suruga, Terukazu

doi:10.1057/9780230377974_9

Cited by 14 publications

(13 citation statements)

References 5 publications

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“…results regarding the answer to such a basic question as the evolution of employment adjustment speed certainly lies in the differences of data (for example macro vs. micro as shown by Chuma, 2002), of samples of firms and period or of modelling of the process (continuous vs. discrete). However, to our view, a key reason, as we will try to show it in our own result, refers to an inappropriate modelling of the heterogeneity, which more deeply correspond to an insufficient attention to the increasing heterogeneity of the Japanese human resources management models from the 1990s, despite isolated and not enough systematic attempts (see for example Suruga, 1998;Chuma, 2002;Abe, 2002;Noda, 2002).…”

Section: The Japanese Case: Literature Review and Stylized Factsmentioning

confidence: 75%

“…Many studies have already found significant differences of speed of employment adjustment across industries (Abe, 2002). Regarding the size, it tends to slow down the speed of adjustment for the following reason (Suruga, 1998): the bigger a firm is, the more it can resort to internal transfers of a part of the workforce, which is not accounted in studies focusing on external mobility.…”

Section: The Japanese Case: Literature Review and Stylized Factsmentioning

confidence: 99%

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How Did the Japanese Employment System Change Investigating the Heterogeneity of Downsizing Practices Across Firms

et al. 2018

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Beyond the general issue of institutional change at the aggregate level, some studies have shown that the diversity of Japanese firms has increased since the late 1990s, both in terms of performance and organization. This paper contributes to this literature by investigating the evolving employment practices at the firm level. In mobilizing a database of listed manufacturing firms, we focus on the evolution of the speed of downsizing between the 1990s and the 2000s. A specificity of our paper is that we do not limit our analysis to the introduction of individual effects but we rather resort to a Bayesian estimation procedure, which yields to (firm-specific) individual forecasts of the parameters of the adjustment process modelled with random coefficients. The first major result we get is a decreasing average speed of downsizing, contrary to what is found in a simple estimation with individual effects. Second, we confirm the increasing heterogeneity of Japanese firms between the 1990s and the 2000s, through a rising dispersion of the speed of downsizing. Third, we are able, from a descriptive viewpoint to identify some characteristics of firms with different speed of downsizing.

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Section: The Japanese Case: Literature Review and Stylized Factsmentioning

confidence: 75%

Section: The Japanese Case: Literature Review and Stylized Factsmentioning

confidence: 99%

How Did the Japanese Employment System Change Investigating the Heterogeneity of Downsizing Practices Across Firms

et al. 2018

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“…9 Further, it is assumed that the speed of employment adjustment will differ in times of surplus and loss, so a dummy variable (DUM) is added to indicate when the firm is showing a loss (1 ¼ loss). Previous research has confirmed that firms experiencing two consecutive periods of loss undertake major employment adjustments (Koike 1983;Muramatsu 1986Muramatsu , 1995Suruga 1997). If that is the case, the parameters for this dummy variable should take on a positive value.…”

Section: Introductionmentioning

confidence: 91%

“…The speed of employment adjustment is used as corroborating evidence of the stable employment system in Japanese firms. and Suruga (1997) have analyzed financial data from individual firms to measure the speed of employment adjustment. Suruga estimates several models of employment adjustment and finds that the deficit model fits the evidence the best.…”

Section: Introductionmentioning

confidence: 99%

Corporate Governance Structure and Employment Adjustment in Japan: An Empirical Analysis Using Corporate Finance Data

Abe

2002

Industrial Relations

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I investigate the influence of corporate governance structures on employment adjustment in Japanese firms, using financial data for firms listed on the Japanese stock market. The results indicate that corporate governance structures affect the rate of employment adjustment. The presence of large stockholders and the degree of stock cross–holding lengthens the period the firm remains in debt and slows down the speed of employment adjustment.

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“…In addition, the practice of "lifetime employment" does not necessarily mean that layoffs never happen in large Japanese firms. It has been documented that Japanese firms, even large ones, did lay off some of their regular employees, following the first oil crisis (see, for example, Koike, 2005, Suruga, 1998, Nakata and Takehiro, 2003, Chuma, 2002 years. This paper is aimed at providing such evidence and contributing to the debate over the convergence theory.…”

Section: Introductionmentioning

confidence: 99%

Long-Term Employment and Job Security over the Past 25 Years

Kambayashi¹,

Kato

2016

ILR Review

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Taking advantage of a recent relaxation of Japanese government's data release policy, we conduct the first cross-national analysis of micro data from Japan's Employment Status Survey and its U.S. counterpart, Current Population Survey. Our focus is to document and contrast changes (or lack thereof) in long-term employment and job security over the last twenty five years between the two largest advanced market economies. On the one hand, we find that in spite of the prolonged economic stagnation, prime-age male workers with at least 5 years of tenure in Japan continued to enjoy much higher job stability than their U.S. counterparts consistently over the last twenty-five years. Most remarkably Japan's "Lost Decade" is found to have little discernible adverse effect on job stability of this group of Japanese employees. On the other hand, we find that job stability for mid-career hires and youth workers did deteriorate in Japan over the last twenty-five years. Our cross-national regression analysis of the odds of job loss confirms the consistently more important role that seniority plays in protecting workers from job loss in Japan than in the U.S., and uncovers that such Japan-U.S. gap in seniority's influence in job stability widened over the last twenty five years. It is the U.S. economy with the longest economic expansion not the Japanese economy with the longest economic stagnation in which employment stability and job security deteriorated. As such, contrary to the conventional wisdom, our findings point to the absence of convergence of the Japanese and U.S. systems. However, our job retention analysis, combined with our regression analysis of the odds of job separation in Japan over 1982-2007, shows that mid-career hires, young new job market entrants, and college-educated women in Japan were less fortunate, with their job stability deteriorating significantly. (JEL: J63, J64, J41, P52)

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Employment Adjustment in Japanese Firms: Negative Profits and Dismissals

Cited by 14 publications

References 5 publications

How Did the Japanese Employment System Change Investigating the Heterogeneity of Downsizing Practices Across Firms

How Did the Japanese Employment System Change Investigating the Heterogeneity of Downsizing Practices Across Firms

Corporate Governance Structure and Employment Adjustment in Japan: An Empirical Analysis Using Corporate Finance Data

Long-Term Employment and Job Security over the Past 25 Years

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