Distribution Keiretsu, Foreign Direct Investment, and Import Penetration in Japan
AbstractDirected marketing channels--known in Japan as distribution keiretsu--are more likely than others to be headed by a primary wholesaler that is vertically integrated with the manufacturer, which for foreign manufacturers entails their directly investing in Japan-based wholesale subsidiaries. I support this statement with empirical evidence and theoretical reasoning. Briefly stated, vertical integration better aligns the noncontractible wholesaler effort levels with the manufacturer's profit, but necessarily forgoes the inherent advantage of an independent wholesaler at market-widening efforts. This establishes a trade-off bearing on the decision to vertically integrate. Where market-widening efforts complicate the resolution of retail externalities, it can be better to forgo market-widening efforts altogether and instead focus exclusively on resolving the externalities, vertically integrating with the wholesaler in order to better administer a distribution keiretsu.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Japanese Economy.
Volume (Year): 33 (2005)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=110911
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Nguyen).
If references are entirely missing, you can add them using this form.