Manufacturing SMEs in Japan: more subcontracting intensive versus less subcontracting intensive industries

Byline: M.H. Bala Subrahmanya This paper probes the changing structure and importance, inter-firm influence and economic performance of SMEs in More Subcontracting Intensive (MSI) industries as compared to Less Subcontracting Intensive (LSI) industries in the course of changing subcontracting intensities of Japanese manufacturing during 1976-2003. This paper finds that percentage of subcontracting SMEs has steadily declined since the early 1980s but not inter-firm relationship between small, medium and large firms. What is significant to note is that MSI industries did not suffer relative to LSI industries when percentage of subcontracting SMEs declined in Japanese manufacturing.