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Re-Visiting The Roots Of Japan'S Structural Decline:The Role Of The Japanese Corporation

Author

Listed:
  • Cowling, Keith

    (Department of Economics,University of Warwick)

  • Tomlinson, Philip R.

    (Department of Economics,University of Warwick)

Abstract

For a long period in the twentieth century, the development of the Japanese corporation appeared congruent with the development of the Japanese economy. The growth maximising behaviour of the Japanese corporation and the preference for internal growth over acquisitions (see Odagiri, 1992) appeared to suit the long-term ambitions of Japan. Now, that formerly clear connexion between the ambitions of corporate Japan and the Japanese public interest is no longer so clear. Increasingly, the global ambitions of the corporation appear as an impediment to Japan's development. By favouring the development of large-scale transnational corporations, Japanese industrial policy-making appears to have contained a fundamental flaw. Japan is now dominated by large-scale organisations that are controlled by a corporate elite. It is unlikely that their strategic decisions will correspond with the wider public interest, which raises the possibility that Japan is now afflicted with "strategic failure". Other examples from around the world suggest that Japan is not unique in this respect. Alternative ways forward are suggested.

Suggested Citation

  • Cowling, Keith & Tomlinson, Philip R., 2002. "Re-Visiting The Roots Of Japan'S Structural Decline:The Role Of The Japanese Corporation," The Warwick Economics Research Paper Series (TWERPS) 624, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:624
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    File URL: https://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/twerp624.pdf
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    References listed on IDEAS

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    1. Teece, David J, 1993. "The Dynamics of Industrial Capitalism: Perspectives on Alfred Chandler's Scale and Scope," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 199-225, March.
    2. Masahiko Aoki, 2013. "Toward an Economic Model of the Japanese Firm," Chapters,in: Comparative Institutional Analysis, chapter 18, pages 315-341 Edward Elgar Publishing.
    3. Hanazaki, Masaharu & Horiuchi, Akiyoshi, 2000. "Is Japan's Financial System Efficient?," Oxford Review of Economic Policy, Oxford University Press, vol. 16(2), pages 61-73, Summer.
    4. Ellman,Michael, 2014. "Socialist Planning," Cambridge Books, Cambridge University Press, number 9781107074736, May.
    5. Cowling, Keith & Sugden, Roger, 1998. "The Essence of the Modern Corporation: Markets, Strategic Decision-Making and the Theory of the Firm," The Manchester School of Economic & Social Studies, University of Manchester, vol. 66(1), pages 59-86, January.
    6. Cowling, Keith & Tomlinson, Philip R, 2000. "The Japanese Crisis--A Case of Strategic Failure?," Economic Journal, Royal Economic Society, vol. 110(464), pages 358-381, June.
    7. Boltho, Andrea & Corbett, Jenny, 2000. "The Assessment: Japan's Stagnation--Can Policy Revive the Economy?," Oxford Review of Economic Policy, Oxford University Press, vol. 16(2), pages 1-17, Summer.
    8. Glyn, Andrew & Rowthorn, Bob, 1988. "West European Unemployment: Corporatism and Structural Change," American Economic Review, American Economic Association, vol. 78(2), pages 194-199, May.
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    Citations

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    Cited by:

    1. Joost van Acht & Joop Stam & Roy Thurik & Ingrid Verheul, 2004. "Business Ownership and Unemployment in Japan," Tinbergen Institute Discussion Papers 04-036/3, Tinbergen Institute.
    2. Andre van Stel & Lendert Baljeu & Roy Thurik & Ingrid Verheul, 2006. "The Contribution of Business Ownership in Bringing Down Unemployment in Japan," Papers on Entrepreneurship, Growth and Public Policy 2006-05, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    3. André van Stel & Roy Thurik & Ingrid Verheul & Lendert Baljeu, 2007. "The Relationship between Entrepreneurship and Unemployment in Japan," Tinbergen Institute Discussion Papers 07-080/3, Tinbergen Institute, revised 14 Jul 2008.

    More about this item

    Keywords

    The Japanese Corporation ; strategic-decision making ; strategic failure; industrial policy;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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