Excess Capacity and Difficulty of Exit

TitleAcknowledgmentsContents1 Introduction1.1 The Requirement for Downsizing and Exit since the 1980s1.2 Worldwide Difficulty of Downsizing and Exit1.3 Purpose and Outline of the BookReferences2 Zombie Businesses in Electrical Industry: Case Studies2.1 The case of NEC2.2 The case of SONY2.3 The case of Mitsubishi ElectricReferences3 Misallocation of Internal Fund to Loss Making Zombie Businesses in Electrical Industry3.1 Conceptual Framework3.1.1 Empire-Building Hypothesis3.1.2 Diversification Discount Hypothesis3.1.3 Employment Protection Hypothesis3.2 Empirical Design3.3 Descriptive Statistics3.4 Misallocation of Internal Fund to Loss Making Divisions3.4.1 The Failure of Internal Governance3.4.2 Waste of Internal Fund3.5 Concluding RemarksReferences4 Subsequent Downsizing after Mergers of Respective Loss Making Divisions among Concerned Companies4.1 The Case of Japan Display4.2 The Case of Elpida4.3 The Case of Renesas4.4 Concluding RemarksReferences5 Final Remarks5.1 New Findings of the Book: Delay of exit and the Lost Two Decades of Japan5.2 Implication for the WorldReferences
About the Author:

Peng Xu is a professor at Hosei University, Tokyo, where he teaches corporate finance and corporate governance. His areas of expertise include hedge fund activism, corporate restructuring, and corporate governance. Dr. Xu is the author of numerous corporate finance and governance articles that have appeared in academic journals in economics, including the Journal of Japanese and International Economies, Japan and the World Economy, Journal of Restructuring Finance, and Journal of Financial Markets. He received the M&A Forum Award 2016 as a chapter author. He was a faculty fellow of the Research Institute of Economy, Trade and Industry during 2003-2006. He has served on several journal editorial boards, including as an editor of the Journal of Economic Policy Studies and the Law and Economics Review. He received his Ph.D. in economics from The University of Tokyo and his B.A. in social engineering from the University of Tsukuba.

Sumio Saruyama is a lead economist of the Japan Center for Economic Research (JCER). He received his B.A. from The University of Tokyo. He studied at Harvard University in 1985-1986. and received his Ph.D. in economics from Hosei University in 2018 for his research on exit behavior of troubled firms. At JCER, he is involved in analysis and policy recommendations on structural issues in the Japanese economy, such as the declining birthrate and aging population, public finance, and trade policies.