Walter Adams and James Brock are correct. There is little overseas evidence to support the proposition that there is a close link between international competitiveness and firm size. As Adams and Brock point out, the Japanese experience, in particular, highlights the absence of any intimate connection between these variables. The distinctive vitality of Japan's small-scale sector is a very old story. Whether it is the last decades of the Tokugawa period (1600-1868), the Meiji period (1868-1912), the Taisho period (1912-1926), or the Showa (1926-1989) period, commentators have invariably noted the surprising persistence of Japan's smaller-scale enterprises. Where once they were treated as curious survivals from Japan's "feudal" past, these small units have long been recognized as an essential element in Japan's modern economic growth.
Gary R. Saxonhouse,
Japan and the Bigness Mystique,
Nw. J. Int'l L. & Bus.