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Japan's Corporate Groups: Collusive or Competitive? An Empirical Investigation of Keiretsu Behavior

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  • Weinstein, D.E.
  • Yafeh, Y.

Abstract

This paper uses data on manufacturing firms listed on the Tokyo Stock Exchange to evaluate whether firms that are part of Japanese financial groups (keiretsu) behave differently from other Japanese firms. The results from this analysis reject the hypothesis that these firms collude in order to raise profits. The data do suggest that keiretsu firms are heavily influenced by their banks to produce at levels beyond those warranted by pure profit maximization. These higher levels of output may also explain why entry into markets with strong keiretsu presence is often described as difficult. Copyright 1995 by Blackwell Publishing Ltd.
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Suggested Citation

  • Weinstein, D.E. & Yafeh, Y., 1993. "Japan's Corporate Groups: Collusive or Competitive? An Empirical Investigation of Keiretsu Behavior," Harvard Institute of Economic Research Working Papers 1623, Harvard - Institute of Economic Research.
  • Handle: RePEc:fth:harver:1623
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    References listed on IDEAS

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    Keywords

    stock market ; enterprises;

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