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Long-Term Cooperation in Japanese Vertical Relationships

Author

Listed:
  • Kenji Kojima

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

Abstract

The primary purpose of the study is to identify significant features of Japanese vertical relationships and to provide economic rationale. Japanese vertical relationships, particularly automobile industry, are examined in comparison with those in the U.S. Both buyers and suppliers can be identified to be mutually dependent and have developed long-term cooperative relationships with relationship-specific investments. They have developed facilitating practices to build and maintain trust between them. It could reduce transaction costs and eliminate inefficiencies in trading relationships with cooperation and reputation in long-term relationships.

Suggested Citation

  • Kenji Kojima, 1999. "Long-Term Cooperation in Japanese Vertical Relationships," Discussion Paper Series 106, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:106
    as

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    Keywords

    Commitment; Cooperation; Reputation; Japanese firms; Long-term relationships; Relationship-specific investment; Vertical relationships;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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