But, with the stagnant economy and sluggish stock prices, it became difficult to continue to depend on such unrealized gains, and this also seems to be partly responsible for the recent change in attitude of corporate managers who now emphasize rates of return over the short term.
The data show that the ROA of Japanese firms was an average 7.8 percent during the 1980s, but declined to 5.1 percent in the 1990s.1 While this was partly due to the business cycle factor, it is true that the profitability of Japanese firms has been on a declining trend. B.