Publications
Do Well Managed Firms Make Better Forecasts?
(with Nick Bloom, Charlotte Meng, Paul Mizen, Rebecca Riley, Tatsuro Senga, and John Van Reenen)
Accepted, Review of Economics and Statistics
Abstract: We link a new UK management survey covering 8,000 firms to panel data on productivity in manufacturing and services. There is a large variation in management practices, which are highly correlated with productivity, profitability and size. Uniquely, the survey collects firms’ micro forecasts of their own sales and also macro forecasts of GDP. We find that better managed firms make more accurate micro and macro forecasts, even after controlling for their size, age, industry and many other factors. We also show better managed firms appear aware that their forecasts are more accurate, with lower subjective uncertainty around central values. These stylized facts suggest that one reason for the superior performance of better managed firms is that they knowingly make more accurate forecasts, enabling them to make superior operational and strategic choices.
Other Publications
Comment on “Trade and FDI Policies in an Interdependent World: Lessons From East Asia”
2026, Asian Economic Policy Review
Working Papers
Do Supply Chain Disruptions Harm Firm Performance? Evidence from Japan
(with Takafumi Suzuki)
Abstract: Recent major supply-chain disruptions and the measures taken by firms to protect themselves against future disruptions have raised concerns over their long-term implications on firm performance. Using panel data from 2007 to 2018 on buyer-supplier linkages in Japan, we study the effects of the 2011 Great East Japan Earthquake on firm performance and supplier relationships. In a difference-in-differences empirical strategy, we focus on buyer firms outside the disaster area and compare those with and without suppliers in the disaster area. On average, treated firms managed to "weather the storm" - their ability to replace lost suppliers swiftly allowed them not to be differentially hurt by the earthquake. Nonetheless, buyers in long-term relationships with suppliers in the disaster area suffered significant sales losses and struggled to replace their old suppliers. Moreover, we show that treated firms disproportionately accumulated new suppliers closer to their headquarters. Using seismological data, we show that this "nearshoring" was not due to information updates on earthquake risk and suggest it could be due to firms putting greater weight on supply chain resiliency.
Offshoring Bias in Productivity Estimates: Evidence from Japanese Customs Data
(with Kyoji Fukao, Tomohiko Inui, Tetsushi Horie, Young Gak Kim, Hyeog Ug Kwon, and Hongyong Zhang)
Abstract: This study examines the extent to which imports of intermediate inputs lead to biased estimates of firm-level total factor productivity (TFP) growth, a phenomenon referred to as “offshoring bias.” To this end, we construct a novel firm-level dataset by linking the Japanese customs data with the financial information. We newly develop firm-specific import deflators at the granular Harmonized System 9-digit product level and use them to deflate import values. Comparing TFP estimates based on this approach with those based on commonly used industry-level deflators reveals that the conventional method tends to overestimate TFP growth. Moreover, our regression results indicate that the offshoring bias is more pronounced among firms with higher import shares. This suggests that conventional TFP estimation methods may systematically overestimate productivity growth for firms that rely to a greater extent on imported intermediate inputs.
Spillovers through the Supply Chains: How Large Plant Openings Affect Local Supplier Plants
(with Takafumi Suzuki)
Abstract: This study investigates how becoming a supplier to a large newly opened plant affects the subsequent performance of small incumbent plants. To address this question, we integrate detailed plant-level production data, records of new openings of large plants, and supply chain information. We adopt the framework developed by Callaway and Sant’Anna (2021) and exploit the spatial distribution of new entrants to construct a quasi-experimental setting, comparing firms that start supplying nearby new entrants with those that do not. Our event-study estimates reveal that while local first-time supplier plants benefit significantly --- both statistically and economically --- from the large plant openings, never-supplier plants in the geographical proximity experience negative impacts. We interpret these opposite effects arise from intensified regional competition, driven by the growth of newly appointed suppliers. From a policy perspective, these insights highlight the importance of facilitating effective matches between large newly-opened plants and local first-time suppliers, as well as providing support to never-supplier firms that find themselves disadvantaged by increased competition.
Tax-Motivated Transfer Pricing and Country-by-Country Reporting: Evidence from Japanese Customs Data
(with Makoto Hasegawa, Takafumi Suzuki, and Masayoshi Hayashi)
Abstract: Using Japanese firm-level customs data from 2014 to 2019, we investigate profit shifting through transfer pricing by Japanese multinational corporations. We find that Japanese firms reduce related-party export prices relative to arm’s-length prices as the tax differentials between Japan and destination countries widen, indicating taxmotivated transfer pricing. The responsiveness of related-party prices to these tax differentials is, on average, smaller than that reported in previous studies but varies depending on transaction characteristics. Specifically, transfer mispricing is more pronounced in transactions involving larger parent-affiliate pairs and products that are exported less frequently. We also examine the impact of the country-by-country reporting (CbCR) system, introduced in Japan in 2016, and find no evidence that it reduced transfer mispricing by Japanese multinationals subject to CbCR.
(with Makoto Hasegawa, Takafumi Suzuki, and Masayoshi Hayashi)
Abstract: Border taxes are effective only insofar as customs can verify declarations at the border. We study whether higher border tax rates induce importers to understate the declared tax base, and whether such responses are concentrated where customs has less information from past transactions. Using confidential Japanese customs microdata linked to UN Comtrade, we construct HS6 product–partner–year cells for 2014–2021 and estimate how tax rates affect the trade-cost-adjusted log gap between partnerreported exports and Japan-reported imports, a reduced-form proxy for trade misreporting. The average semi-elasticity of this gap with respect to the tax rate is positive but statistically indistinguishable from zero. Yet the average masks sharp heterogeneity: responses are close to zero in information-rich lanes but economically meaningful in thin-information lanes, and somewhat larger where implied-unit-value dispersion is greater. A decomposition of mirror-data outcomes shows that the tax-responsive component of these discrepancies appears mainly in quantities rather than in implied unit values. The results imply that, even in a high-capacity setting, the effective incidence of border taxes depends on the lane-level information available for enforcement.
Do Firms Avoid Compliance Costs? Evidence from VAT Reforms in Japan
(with Takafumi Suzuki)
Abstract: This paper disentangles the motivations behind how enterprises respond to size-dependent tax regulations by exploiting the value-added tax (VAT) reforms in Japan. In Japan, both tax threshold and tax rate have been changed over the past three decades since the introduction of VAT. We build on the model of Harju et al. (2019) to incorporate various tax reforms and derive empirically testable implications. By using a panel of Japanese Census of Manufacture covering the periods of VAT introduction and reforms, we conducted bunching estimation. The local estimates imply that the observed output response by enterprises is mainly caused by compliance costs rather than tax rates for small enterprises in Japan. The results suggest that the authorities are encouraged to ease compliance costs while enhancing tax revenue to achieve more efficient tax design.
Selected Work in Progress
Do Environmental Regulations Disrupt Supply Chains?
(with Jevan Cherniwchan, Takafumi Suzuki, and Akio Yamazaki)
Theory and Evidence of Firm-to-firm Transaction Network Dynamics
Markups and Pass-through along the Supply Chains
(with Takafumi Suzuki)
Trade and Management: Evidence from Brexit
(with Paul Mizen, Rebecca Riley, and Greg Thwaites)