Small Business Economics

, Volume 18, Issue 1–3, pp 163–175

Subcontracting and the Performance of Small and Medium Firms in Japan

  • Fukunari Kimura


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.


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Copyright information

© Kluwer Academic Publishers 2002

Authors and Affiliations

  • Fukunari Kimura
    • 1
  1. 1.Faculty of EconomicsKeio UniversityMinato-ku, TokyoJapan

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