Subcontracting and the performance of small and medium firms in Japan

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95 Citations (Scopus)


This paper provides an empirical analysis of the choices made by Japanese firms with respect to subcontracting status, that is, whether to take in work as subcontractor, to outsource work to subcontractors, to do both or to do neither. It shows that the probability of working as a subcontractor, a choice made by many small firms in Japan, is negatively related to size, foreign sales and technological capability. Furthermore, profits do not appear to be higher for subcontracting firms; indeed, they are highest for the group that does not get involved in any type of subcontracting, whether as a supplier or as an outsourcer.

Original languageEnglish
Pages (from-to)163-175
Number of pages13
JournalSmall Business Economics
Issue number1-3
Publication statusPublished - 2002

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics


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