WP  Global Economy  2019.08.28

Working Paper(19-006E) "Transition to a Modern Regime and Change in Plant Lifecycles: A Natural Experiment from Meiji Japan"

This is working paper.

This paper examines how political, social, and economic regime changes affect the lifecycles of manufacturing plants exploiting Japan's transition from a feudal regime to a modern regime in the late nineteenth century as a natural experiment. Using plant-level data for 1902, including the foundation year of each plant, we explored how the experience-size profiles of plants differ before and after the regime change. Plants were found to grow much faster after the regime change and the acceleration of growth after the regime change was much greater for the plants in exporting industries, industries intensively using steam power, and plants adopting a corporate form. These findings suggest that access to export markets, access to modern technologies, and availability of the modern corporate form were the channels through which the regime change affected the experience-size profile of plants. The findings on the acceleration of plant growth after the regime change are supported by the analyses of more detailed data from the silk-reeling industry.