Abstract
Business groups have been an important feature of Japan’s industrial organization since at least the beginning of the 20th century. As early as the 1870s there had already emerged the Yasuda banking complex, Mitsubishi shipping conglomerate and Mitsui trading company, all of which later became the cornerstones of the vast commercial empires known as the zaibatsu, precursors of the current-day financial keiretsu. Each zaibatsu consisted of disparate firms, including banks, trading companies and manufacturing concerns, much of whose stock reposed in a common holding company qua head-office, which was itself controlled by a wealthy family. In Japan’s First World War boom the zaibatsu expanded from their initial strongholds in mining, banking and the brokerage of foreign trade into new and diverse activities, including shipbuilding, iron and steel, and insurance. Nevertheless, in the 1920s and 1930s more than one half of the Japanese labour force continued to work in very small enterprises or were self-employed. Also, many of the large leading firms including cotton-spinning firms, remained outside the zaibatsu orbit and were diffusely held. The zaibatsu form of organization, in which a few families maintained concentrated ownership of diverse commercial holdings, was never the only viable way of financing and administering businesses in Japan.
Keywords
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsPreview
Unable to display preview. Download preview PDF.
References
Aghion, Phillipe and Patrick Bolton (1987) ‘Contracts as a Barrier to Entry’, American Economic Review, vol. 35, pp. 38–401.
Aoki, Masahiko (1984) ‘Shareholders’ Non-unanimity on Investment Financing, Banks Versus Individual Investors’, in M. Aoki (ed.), The Economic Analysis of the Japanese Firm (Amsterdam: North-Holland).
Aoki, Masahiko (1987) ‘The Japanese Firm in Transition’, in K. Yamamura and Y. Yasuba (eds), The Political Economy of Japan, Volume 1, The Domestic Transformation (Stanford, CA: Stanford University Press), pp. 263–88.
Bisson, T. A. (1954) Zaibatsu Dissolution in Japan (Berkeley, CA: University of California Press).
Coase, Ronald H. (1937) ‘The Nature of the Firm’, Economica, vol. 4, pp. 386–405.
Demsetz, Harold (1982) ‘Barriers to Entry’ American Economic Review, vol. 72, no. 1, pp. 47–57.
Executive Office of the Fair Trade Commission of Japan (1980) ‘KigyKigyō shudan no jittai ni tsuite’ (Concerning the state of business groups), kosei torihiki, 394, pp. 20–4.
Financial Supervisory Agency, Government of Japan (1998) ‘The Current Status of RiskManagement Loans Held by Deposit-Taking Financial Insti tutions’, 17 July (Table: Loss on Disposal of Bad Loans of All Japanese Banks).
Flath, David (1993) ‘Shareholding in the Financial Keiretsu’, Review of Economics and Statistics, vol. 75, pp. 249–57.
Flath, David (1996) ‘The Keiretsu Puzzle’, Journal of the Japanese and Inter national Economies, vol. 10, pp. 101–21.
Flath, David (2000) The Japanese Economy (Oxford: Oxford University Press).
Gerlach, Michael (1993) Alliance Capitalism: The Social Organization of Japanese Business, (Berkeley, CA: University of California Press).
Hadley, Eleanor (1970) Antitrust in Japan (Princeton, NJ: Princeton University Press).
Holmström, Bengt and Jean Tirole (1997) ‘Financial Intermediation, Loan able Funds, and the Real Sector’, Quarterly Journal of Economics, vol. 112, no. 3, pp. 663–91.
Kester, Carl (1991) Japanese Takeovers, the Global Contest for Corporate Control (Cambridge, Mass.: Harvard Business School).
Kobayashi Y. (1980) Kigyō shudan no bunseki (Economic analysis of enter prise groups) (Hokkaido University, Sapporo).
Lawrence, Robert Z. (1991) ‘Efficient or Exclusionist? The Import Behavior of Japanese Corporate Groups’, Brookings Papers on Economic Activity, vol. 1, pp. 311–41.
Livingston, Jon, Joe Moore and Felicia Oldfather (eds) (1973) Postwar Japan, 1945 to the Present (New York: Random House), pp. 107–15.
Miyazaki, Yoshikazu (1967) ‘Rapid Economic Growth in Post-War Japan — With Special Reference to “Excessive Competition” and the Formation of “Keiretsu”’, The Developing Economies, vol. 5, pp. 329–50.
Morikawa, Hidemasa (1992) Zaibatsu, the Rise and Fall of Family Enterprise Groups in Japan (Tokyo: University of Tokyo Press).
Nakamura, Takafusa (1971) Economic Growth in Prewar Japan (New Haven, CT: Yale University Press).
Odagiri H. (1975) ‘Kigyō; shudan no riron’ (A theory of industrial groups), Kikan riron keizaigaku, vol. 26, pp. 144–54.
Ramseyer, J. M. (1987) ‘Takeovers in Japan: Opportunism, Ideology, and Corporate Control’, UCLA Law Review, vol. 35, pp. 1–64.
Rasmussen, Eric J., Mark Ramseyer and John S. Wiley Jr (1991) ‘Naked Exclusion’, American Economic Review, vol. 39, pp. 1137–45.
Sheard, Paul (1991) ‘The Economics of Interlocking Shareholding in Japan’, Ricerche Economiche, vol. 45, pp. 421–48.
Stigler, George (1951) ‘The Division of Labor is Limited by the Extent of the Market’, Journal of Political Economy, vol. 59, no. 3.
Toyo keizai (1988–99) Kigyō keiretsu sōran (Handbook of keiretsu enterprises) (Tokyo: Toyo Keizai).
Uekusa, Masu (1977) ‘Effects of the Deconcentration Measures in Japan’, The Antitrust Bulletin, vol. 22, no. 3, pp. 687–715.
Yafeh, Yishai (1995) ‘Corporate Ownership, Profitability, and Bank–Firm Ties: Evidence from the American Occupation Reforms in Japan’, Journal of the Japanese and International Economies, vol. 9, pp. 154–73.
Yamamura, Kozo (1968) ‘A Re-examination of Entrepreneurship in Meiji Japan (1868–1912)’, The Economic History Review, vol. 21, no. 1, pp. 144–58.
Editor information
Editors and Affiliations
Copyright information
© 2001 David Flath
About this chapter
Cite this chapter
Flath, D. (2001). Japan’s Business Groups. In: Nakamura, M. (eds) The Japanese Business and Economic System. Palgrave Macmillan, London. https://doi.org/10.1057/9780230512283_11
Download citation
DOI: https://doi.org/10.1057/9780230512283_11
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-42608-9
Online ISBN: 978-0-230-51228-3
eBook Packages: Palgrave Business & Management CollectionBusiness and Management (R0)