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The Fable of the Keiretsu

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Author Info
Yoshiro Miwa (Faculty of Economics, University of Tokyo)
J. Mark Ramseyer (Harvard Law School and CIRJE, Faculty of Economics, University of Tokyo)

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Abstract

Central to so many accounts of post-war Japan, the keiretsu corporate groups have never had economic substance. Conceived by Marxists committed to locating "domination" by "monopoly capital," they found an early audience among western scholars searching for evidence of culture-specific group behavior in Japan. By the 1990s, they had moved into mainstream economic studies, and keiretsu dummies appeared in virtually all econometric regressions of Japanese industrial or corporate structure. Yet the keiretsu began as a figment of the academic imagination, and they remain that today. The most commonly used keiretsu roster first groups large financial institutions by their pre-war antecedents. It then assigns firms to a group if the sum of its loans from those institutions exceeds the amount it borrows from the next largest lender. Other rosters start by asking whether firm presidents meet occasionally with other presidents for lunch. Regardless of the definition used, cross-shareholdings were trivial even during the years when keiretsu ties were supposedly strongest, and membership has only badly proxied for "main bank" ties. Econometric studies basing "keiretsu dummies" on these rosters have produced predictably haphazard results: some are a function of misspecified equations, while others depend on outlying data points and some are specific to one keiretsu roster but not others. The only reliably robust results are the artifacts of the sample biases created by the definitions themselves.

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Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-109.

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Length: 36 pages
Date of creation: Mar 2001
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Handle: RePEc:tky:fseres:2001cf109

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  11. Miwa Yoshiro & J. Mark Ramseyer, 2000. "Banks and Economic Growth: Implications from Japanese History," CIRJE F-Series CIRJE-F-87, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
    Other versions:
  12. Kang, Jun-Koo & Shivdasani, Anil, 1997. "Corporate restructuring during performance declines in Japan," Journal of Financial Economics, Elsevier, vol. 46(1), pages 29-65, October. [Downloadable!] (restricted)
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  14. Fukuda, Atsuo & Hirota, Shinichi, 1996. "Main Bank Relationships and Capital Structure in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 10(3), pages 250-261, September. [Downloadable!] (restricted)
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  18. Saxonhouse, Gary R, 1993. "What Does Japanese Trade Structure Tell Us about Japanese Trade Policy?," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 21-43, Summer. [Downloadable!] (restricted)
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  20. Robert Z. Lawrence, 1991. "Efficient or Exclusionist: The Import Behavior of Japanese Corporate Groups," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1991-1), pages 311-341. [Downloadable!]
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  26. Yoshiro Miwa & J. Mark Ramseyer, 2001. "Does Ownership Matter? Evidence from the Zaibatsu Dissolution Program," CIRJE F-Series CIRJE-F-105, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
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  27. Fumio Hayashi, 1997. "The Main Bank System and Corporate Investment: An Empirical Reassessment," NBER Working Papers 6172, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Yoshiro Miwa & J. Mark Ramseyer, 2001. "Does Ownership Matter? Evidence from the Zaibatsu Dissolution Program," CIRJE F-Series CIRJE-F-105, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
    Other versions:
  2. Larry D. Wall & Alan K. Reichert & Hsin-Yu Liang, 2008. "The final frontier : the integration of banking and commerce. Part 1, the likely outcome of eliminating the barrier," Economic Review, Federal Reserve Bank of Atlanta. [Downloadable!]
  3. Yoshiro Miwa & J. Mark Ramseyer, 2004. "Deregulation and Market Response in Contemporary Japan: Administrative Guidance, Keiretsu, and Main Banks," CIRJE F-Series CIRJE-F-267, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  4. Takehiko Isobe & Shige Makino & Anthony Goerzen, 2006. "Japanese horizontal keiretsu and the performance implications of membership," Asia Pacific Journal of Management, Springer, vol. 23(4), pages 453-466, December. [Downloadable!] (restricted)
  5. Takehiko Isobe & Shige Makino & Anthony Goerzen, 2006. "Japanese Horizontal Keiretsu and the Performance Implications of Membership," Discussion Paper Series 190, Research Institute for Economics & Business Administration, Kobe University. [Downloadable!]
  6. Jean McGuire & Sandra Dow, 2009. "Japanese keiretsu: Past, present, future," Asia Pacific Journal of Management, Springer, vol. 26(2), pages 333-351, June. [Downloadable!] (restricted)
  7. Kenji Ketsuna & Janet Kiholm Smith & Richard L. Smith, 2003. "Banking Relationships and Access to Equity Capital Markets: Evidence from Japan’s Main Bank System," Claremont Colleges Working Papers 2003-09, Claremont Colleges. [Downloadable!]
    Other versions:
  8. Naohito Abe & Taehun Jung, 2004. "Cross-Shareholdings, Outside Directors, and Managerial Turnover: The Case of Japan," Hi-Stat Discussion Paper Series d04-38, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
  9. Bruce Blonigen, 2005. "A Review of the Empirical Literature on FDI Determinants," Atlantic Economic Journal, International Atlantic Economic Society, vol. 33(4), pages 383-403, December. [Downloadable!] (restricted)
  10. Hideaki Sakawa & Naoki Watanabel, 2009. "Managerial Compensation, Corporate Governance, and Business Performance in Japan: Evidence Using New Micro Data," Global COE Hi-Stat Discussion Paper Series gd08-031, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
  11. Bruce A. Blonigen, 2005. "A Review of the Empirical Literature on FDI Determinants," NBER Working Papers 11299, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Yoshiro Miwa & J. Mark Ramseyer, 2005. "The Good Occupation," CIRJE F-Series CIRJE-F-340, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  13. Joe Peek & Eric S. Rosengren, 2003. "Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan," NBER Working Papers 9643, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  14. Yoshiro Miwa & J. Mark Ramseyer, 2001. "Directed Credit? Capital Market Competition in High-Growth Japan," CIRJE F-Series CIRJE-F-132, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  15. John Armour & B.R. Cheffins & D.A. Skeel Jr., 2002. "Corporate Ownership Structure and the Evolution of Bankruptcy Law in the US and UK," ESRC Centre for Business Research - Working Papers wp226, ESRC Centre for Business Research. [Downloadable!]
  16. Leslie Hannah, 2007. "Pioneering Modern Corporate Governance: a View from London in 1900," CIRJE F-Series CIRJE-F-487, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  17. Dennis Mueller, 2006. "Corporate Governance and Economic Performance," International Review of Applied Economics, Taylor and Francis Journals, vol. 20(5), pages 623-643, December. [Downloadable!] (restricted)
  18. Yoshiro Miwa & J. Mark Ramseyer, 2001. "The Myth of the Main Bank: Japan and Comparative Corporate Governance," CIRJE F-Series CIRJE-F-131, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  19. Kyoji Fukao & Kiyohiko Nishimura & Qing-Yuan Sui & Masayo Tomiyama, 2005. "Japanese Banks’ monitoring activities and the performance of borrower firms: 1981–1996," International Economics and Economic Policy, Springer, vol. 2(4), pages 337-362, December. [Downloadable!] (restricted)
    Other versions:
  20. Yoshiro Miwa & J. Mark Ramseyer, 2003. "Does Relationship Banking Matter? Japanese Bank-Borrower Ties in Good Times and Bad," CIRJE F-Series CIRJE-F-239, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  21. Yishay Yafeh, 2002. "An International Perspective of Japan's Corporate Groups and their Prospects," NBER Working Papers 9386, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  22. Bruce A. Blonigen & Christopher J. Ellis & Dietrich Fausten, 2003. "Industrial groupings and foreign direct investment," University of Oregon Economics Department Working Papers 2003-19, University of Oregon Economics Department, revised 01 Mar 2003. [Downloadable!]
  23. Anderson, Evelyn, 2004. "The Keiretsu Fable - Where does the Truth Lie?," MPRA Paper 8112, University Library of Munich, Germany. [Downloadable!]
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