A Perfect Financial Storm

James C. Abegglen

Chapter 5 in 21st-Century Japanese Management, 2006, pp 91-109 from Palgrave Macmillan

Abstract: Abstract The changes in Japan’s economy as it has moved from historic high growth to full industrial and demographic maturity are nowhere more striking than in the sourcing, structure, and management of corporate finance. These changes, taking place from the mid-1990s, were driven by an extraordinary combination of low and erratic growth rates of the economy, long-continued deflationary price drops, massive declines in asset values, and sharp changes in accountancy rules — in finance, a perfect storm. Companies have weathered the storm by a focus on reducing debt, with bank borrowings very much lessened and other sources of finance more widely used. Careless and unmanaged proliferation of subsidiaries and affiliates has been corrected. Holding company structures allow establishing financial structures for separate businesses. Pension obligations are fully recognized and asset values marked to market value. All this at considerable cost; all made necessary by a brutally difficult economic environment and changed regulations; all now largely accomplished as a new era begins.

Keywords: Cash Flow; Balance Sheet; Money Supply; Share Price; Capital Expenditure (search for similar items in EconPapers)
Date: 2006
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-50085-3_5

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230500853

DOI: 10.1057/9780230500853_5

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().