Intercorporate Networks and Corporate Governance: The Present and Future
What is the state today of Japan’s intercorporate networks centered on “keiretsu” and distinctive corporate governance practices? How are they likely to change in the future? Since the collapse of the bubble in 1990, Japanese-style insider corporate governance supported by the main bank system and keiretsu relationships have begun undergoing significant changes. They ceased to function as effectively as they once did, due to rapid globalization of the world economy and gradual deregulation of the Japanese economy. Watanabe investigates the process of these changes and discusses major contributing factors including increased dependence on financial markets for corporate funding, the attenuation of cross-shareholding, and the increase in the number of foreign shareholders.