آیا مکانیزم انتخاب طبیعی هنوز در رکود شدید کار می کند؟ بررسی اقتصاد ژاپن در دهه 1990

This paper investigates whether the natural selection mechanism (NSM) of economic Darwinism works in severe recessions. Based on micro data, we constructed a comprehensive firm-level panel dataset for Japan from 1994 to 1998 to analyze a firm's entry, survival, and exit and its relationship with TFP. Empirical results show that efficient firms in terms of TFP exited while inefficient ones survived in the banking-crisis period of 1996–1997. Further, this phenomenon is observed mainly for new entrants and contributes substantially to a fall in macro TFP after 1996. These facts strongly suggest a malfunctioning of NSM in severe recessions.

Economic Darwinism explains the survival of the fittest firms in relation to changes in the business environment. According to the laissez-faire principle, the competitive market guarantees that the natural selection mechanism (NSM) of Darwinism leads to efficient resource allocation because firms with low profitability are forced to quit while productive ones survive in the market. As Galor and Moav (2002) explain, the struggle to survive can even produce revolutions that break blockades and open the way to long term economic growth.

It has been widely accepted that the natural selection mechanism of economic Darwinism in competitive markets plays a key role in efficient resource allocation and evolution for long-term economic growth. Recent development of firm models provides theoretical background to the NSM in terms of productivity growth, showing that firms’ rational decisions on entry, surviving, and exit lead to macroeconomic TFP growth. We have attempted to examine whether NSM works properly in the most stressful circumstances: severe recessions. Preceding empirical studies on this issue have examined the working of NSM only in normal times and have shown evidence to support proper functioning of NSM with positive contribution of a firm's turnover to macro level TFP growth. However, the real “test” of NSM is admittedly not normal times, but rather times of crisis. We have focused on the 1990s in the Japanese economy as our period of investigation, with special attention to the 1996–1997 banking crisis period.