A Perfect Financial Storm

  • James C. Abegglen


The changes in Japan’s economy as it has moved from historic high growth to full industrial and demographic maturity are nowhere more striking than in the sourcing, structure and management of corporate finance. These changes, taking place from the mid 1990s, were driven by an extraordinary combination of low and erratic growth rates of the economy, long-continued deflationary price drops, massive declines in asset values, and sharp changes in accountancy rules — in finance, a perfect storm. Companies have weathered the storm by a focus on reducing debt with bank borrowings very much lessened and other sources of finance more widely used. Careless and unmanaged proliferation of subsidiaries and affiliates has been corrected. Holding company structures allow establishing financial structures for separate businesses. Pension obligations are fully recognized. All this at considerable cost; all made necessary by a brutally difficult economic environment and changed regulations; all now largely accomplished as a new era begins.


Cash Flow Balance Sheet Money Supply Share Price Capital Expenditure 
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.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Abegglen, J. C. and G. Stalk Jr (1985) Kaisha, The Japanese Corporation (New York: Basic Books).Google Scholar
  2. Allen, F. and D. Gale (2001) Comparing Financial Systems (Cambridge, Mass.: MIT Press).Google Scholar
  3. Aoki, M. (1995) Information, Corporate Governance, and Institutional Diversity (Oxford: Oxford University Press).Google Scholar
  4. Goldman Sachs (2003) Goldman Sachs Global Strategy Research (Tokyo: Goldman Sachs).Google Scholar
  5. Koo, R. C. (2003) Balance Sheet Recession (Singapore: John Wiley & Sons).Google Scholar
  6. NEC (2003) Annual Report 2003 (Tokyo: NEC).Google Scholar
  7. Okabe, M. (2002) Cross Shareholdings in Japan (Cheltenham: Edward Elgar).Google Scholar
  8. Stiglitz, J. E. (2003) The Roaring Nineties (New York: W. W. Norton).Google Scholar
  9. Teranishi, J. (1999) ‘The Main Bank System’, in T. Okazaki and M. Okuno-Fujiwara (eds), The Japanese Economic System and its Historical Origins (Oxford: Oxford University Press).Google Scholar

Copyright information

© James C. Abegglen 2005

Authors and Affiliations

  • James C. Abegglen

There are no affiliations available

Personalised recommendations