Firm Entry and Exit in the First Stage of Regional Vitalization: Revolving Door Economy or Creative Destruction

　The growth of the regional economy needs an economic metabolism in which high-productivity firms newly enter the market, while low-productivity firms exit the market, resulting in a shift in labor and other production factors. A“ revolving door” economy is an economy in which firms that enter the market have a short existence period, withdraw and enter the market repeatedly, and new entrants do not contribute to productivity improvement. This means that if new entrants are not sufficiently innovative compared to incumbents, even if the rate of entry into business rises, they will simply be replaced by firms whose productivity level has not changed much, and this will not lead to job creation or improving productivity. A contrasting concept is the replacement of firms by Schumpeter's “creative destruction.” The high level of technology and productivity of new firms entering the market drives inefficient incumbents out of the market. Looking at the statistics, there is a tendency for both large cities to have higher business entry and exit rates, but the difference between the entry and exit rates is greater in metropolitan areas. Although it depends on the regional characteristics, location competitiveness is generally higher in metropolitan areas, and there is a tendency for the turnover rate to be high or the survival period to be short. Before and after regional revitalization, we will examine whether or not there is a departure from the revolving door economy by industry and region, using economic census and TSR （Tokyo Shoko Research） data.

論説 (Article)