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Basic Survey of Japanese Business Structure and Activities

Preliminary report of 1997 (4th) Basic Survey of Japanese Business Structure and Activities

June 15, 1998
Enterprise Statistics Division
Research and Statistics Department
E-Mail:qqcebh@meti.go.jp

This survey is conducted to clarify the activities of private enterprises infiscal 1996 with focus on their structure.
It should be noted that the business environment described in this reportdiffers from the present as it tabulates the data of fiscal 1996, when the Japanese economy was in the recovery phase.

1. Business restructuring

a.Employmen

The number of regular employees per enterprise had been on the decrease since fiscal 1994. The ratio of part-timers rose from the previous year in manufacturing, wholesaling and retailing enterprises, with decrease in full-timers and increase in part-timers. The ratio of part-timers was higher than others and almost reaching 40% in retailing enterprises.

Ratio and number of part-timers and number of regular empoloyees per enterprise

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Operating expenses and breakdown

The ratio of operating expenses to sales fell from the previous year in manufacturing, wholesaling and retailing enterprises. It was because, as in the previous year, manufacturers and others strove to reduce operating expenses.

Ratio fo operating expenses to sale

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R&D related expenses and acquisition of tangible fixed assets

The positive stance of manufacturing enterprises towards research and development is shown in the following "per enterprise" figures: the number of research and development staff increased by 0.6 person while regular employees decreased by the same number, and research and development expenses increased by 95 million yen, with the ratio of such expenses to sales rising by 0.1 percentage point.
On the other hand, equipiment investment per manufacturing enterprise stood at 1.07 billion yen, up 7.1% on the previous year.

Number of employees in reseach and development division and R&D expenses per enterprise

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2. Diversification seen in sales breakdown

The ratio of main business fell by 0.1 percentage point from the previous year to 81.7% in manufacturing enterprises, but rose by 1.1 and 0.5 percentage points in wholesaling and retailing enterprises, to 63.1% and 67.9% respectively. In general, the focus remained on the main business.

Ratio of main business

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3. Technology transactions

Technology transactions grew sharply, causing a 9.6% increase in the amount paidfor introducing new technologies and a 10.5% increase in the amount received for the technologies transferred to others. In technology transactions with overseas parties, the amount received for technologies transferred overseas had been on the rise as seen in the yearly growth in export/import ratio of technology transactions by manufacturers.

Export/Import ratio technology transaction

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4. Business performance, profitability and labor productivity in fiscal 1996

a.Business performance

While sales edged up (by 2.6%), operating profit grew sharply (by 11.2%) and recurring profit even more (by 16.3%) in commerce, mining and manufacturing
enterprises. This can be attributed to the decline in financial expenses such as interest and discount charges, which was 26.8% less than in the previous year.The ratio of recurring profit to sales rose by 0.3% points to 2.6%.

Sales, operating profit and recurring profit per enterprise

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Ratio of commerce, mining and manufacturing enterprises generating recurring profit

The ratio of commerce, mining and manufacturing enterprises generating recurringprofit rose by 3.5 percentage points from the previous year to 86.2%. In the segment of large capitalization of 10 billion yen and up, 93.7% of the enterprisesgenerated recurring profit, and 12.5% of them had the ratio of recurring profit to sales at 10% or above.

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Enterprises' stability judged by self-owned capital ratio

The self-owned capital ratio of commerce, mining and industrial enterprises continued to rise following the previous year to 32.0%. The ratio increased on the previous year in manufacturing, wholesaling and retailing enterprises.

Self-owned capital ratio, total capital and self-owned capital per enterprise

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Added value, labor share and labor productivity

Added-value per enterprise increased in all industries. The highest increase of 6.1% was posted by manufacturing enterprises.
Labor share, on the other hand, decreased by 1.2 and 1.1 points respectively in manufacturing and wholesaling enterprises, but edged up by 0.2 points in retailing enterprises. Labor productivity rose in all industries, with manufacturing and wholesaling enterprises posting more than 5% rises.

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Topics: Analyzing high-profit enterprises with panel data

The ROAs of high-profit enterprises, used to measure their earning power, are about 3 times that of average panel data.
Sales, the number of regular employees and total assets per enterprise are all below the average of panel data in high profit enterprises, which suggests that their corporate size is comparatively small. On the other hand, they have higher-than-average levels of recurring profit and labor productivity.
Furthermore, they appear to be investing positively in research and development activities for the future.
High-profit enterprises may have gone through different processes to maintain or achieve the present high earning power:

  • some by steadfastly fulfilling long-term plans, and
  • others by promoting restructuring of assets and curtailing labor force.

Last Update: January 31, 2008
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