The Impact of Globalization on Establishment-Level Employment Dynamics in Japan

Abstract

This study applies Davis, Haltiwanger, and Schuh's method ( 1996 ) to measure job creation/destruction rates of establishments in manufacturing firms using Japanese Economic Census data in 2006 and 2009. Results show that the decrease in net domestic employment arises mainly from firms without subsidiary companies, and non-expanding multinational enterprises. Domestic employment increases when the number of overseas subsidiaries increases. Both job creation/destruction rates of multinational enterprises are high, and the globalization of Japanese firms accelerates de-industrialization in Japan. The job creation and the net employment growth rates of establishments belonging to small-sized firms are lower than those in large-sized firms.