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Ownership Structure and Performance of Japanese Firms: Horizontal Keiretsu, Vertical Keiretsu, and Independents

Author

Listed:
  • Mel Jameson

    (University of Nevada, Las Vegas, USA)

  • Michael J. Sullivan

    (University of Nevada, Las Vegas, USA)

  • Richard L. Constand

    (University of West Florida, USA)

Abstract

Financial economists have devoted substantial effort to describing and analyzing the governance structures of the Japanesekeiretsu, or business groups, to explain how their features serve to improve group performance. The governance mechanisms described provide an informative contrast to the market based monitoring mechanisms of the Anglo-American governance system. In this paper we compare the performance of Japanesekeiretsumember firms with that of independent Japanese firms, whose governance structure is more market based. We also compare the performance of different types ofkeiretsugroup members. Two results emerge. First, we find no support for the hypothesis that the overall set of governance structures ofkeiretsufirms are more effective at maximizing shareholder wealth than are those of independents. In addition, we document significant performance differences among different types of group member firms.

Suggested Citation

  • Mel Jameson & Michael J. Sullivan & Richard L. Constand, 2000. "Ownership Structure and Performance of Japanese Firms: Horizontal Keiretsu, Vertical Keiretsu, and Independents," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 535-556.
    • Handle: RePEc:wsi:rpbfmp:v:03:y:2000:i:04:n:s0219091500000261
    DOI: 10.1142/S0219091500000261
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    Citations

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    Cited by:

    1. Yeh, Tsung-ming & Hoshino, Yasuo, 2002. "Productivity and operating performance of Japanese merging firms: Keiretsu-related and independent mergers," Japan and the World Economy, Elsevier, vol. 14(3), pages 347-366, August.
    2. Peiyi Yu & Bac Luu, 2016. "Bank performance and executive pay: tournament or teamwork," Review of Quantitative Finance and Accounting, Springer, vol. 47(3), pages 607-643, October.

    More about this item

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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