Deborah Swenson: Aggregate outcomes arise as a consequence of multiple decisions at the micro-level. In the case of manufacturing employment, the individual decisions taken by firms as they expand or contract their workforces combine to form the forces of job creation and job destruction that underpin the employment outcomes we observe at the economy-wide level. Thus, Ando and Kimura decide to track individual firm decisions as a means of understanding the factors behind recent changes in Japan's labor market, as they relate to the globalization efforts of Japanese firms.
In many economic studies, the application of sophisticated econometric techniques of analysis requires researchers to work with a subset of the data at hand. For example, because it is often attractive to work with balanced samples of firms—observing firms that were active in each year of a window under observation—the creation of a balanced panel of firms necessarily implies that the...