Firm growth, size, age and behavior in Japanese manufacturing

This paper investigates the relationship between firm growth and firm size, firm age and firm behavior, such as RTD activity and subcontracting, based on the data of nearly 14,000 Japanese manufacturing firms. "The stylized facts" that firm size and age have a negative effect on firm growth are confirmed in the case of Japanese manufacturing firms. Also, a firm's survivability rises with its size and age. RTD expenditure per employee has a significant positive effect on firm growth, which justifies the argument made by Hall ( 1987). Although subcontracting to only one company has no significant effect on firm growth, it has a significant positive effect on a firm's survivability. In addition, subcontracting firms depending on only one company as a customer are subject to no significant age effects. This possibly suggests that the age effect itself has some relation to the extent of the trade network.