Demand Fluctuations and Productivity of Service Industries

Author Name MORIKAWA Masayuki  (Senior Fellow, RIETI)
Creation Date/NO. August 2008 08-E-030
Download / Links


The purpose of this paper is to investigate empirically the relationship between demand fluctuations and productivity of service industries. Specifically, by using unique establishment-level data on service industries in Japan, this paper estimates production functions for six narrowly defined personal-service industries. In almost all the examined service industries, statistically and economically significant negative effects of demand variation on establishment-level productivity are found. This result suggests dispersing holidays may have positive effects on the productivity of service industries.

Published: Masayuki Morikawa, 2012. "Demand Fluctuations and Productivity of Service Industries," Economics Letters, Vol. 117(1), pp. 256-258