Impacts of the Information-technology Revolution on Japanese Manufacturer-supplier Relationships
Abstract'Vertical keiretsu', characterized by suppliers' willingness to make customized investments and their long-term relationships with manufacturers, had been recognized as an important source of strength in Japanese industries. Our model predicts that, in contrast to the recent popular argument, the information-technology revolution can strengthen 'vertical keiretsu'. This is because the efficiency of designing customized parts is significantly enhanced if suppliers undertake a substantial level of IT investments such as the introduction of 3D CAD systems, and the customized nature of such investments could reduce the number of potential suppliers. Our interviews with Japanese manufacturers provide a support to this prediction.
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Bibliographic InfoPaper provided by EconWPA in its series Industrial Organization with number 0207009.
Length: 28 pages
Date of creation: 10 Aug 2002
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Note: Type of Document - pdf; pages: 28; figures: included
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Customized investment; Information technology; Japanese firm; Vertical Keiretsu; Subcontracting;
Other versions of this item:
- Morita, Hodaka & Nakahara, Hirohiko, 2004. "Impacts of the information-technology revolution on Japanese manufacturer-supplier relationships," Journal of the Japanese and International Economies, Elsevier, vol. 18(3), pages 390-415, September.
- L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-08-19 (All new papers)
- NEP-SEA-2002-08-19 (South East Asia)
- NEP-TID-2002-08-19 (Technology & Industrial Dynamics)
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