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

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 state that the net domestic employment decrease mainly arises from firms without subsidiary companies, overseas, and non-expanding multinational enterprises (MNEs). Domestic employment increases when the number of overseas subsidiaries increases. Both job creation/destruction rates of MNEs 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.