Relational Governance in Japanese Vertical Relationships

Kenji Kojima

Kobe Economic & Business Review, 1999, vol. 43, 25-63

Abstract: The primary purpose of the study is to characterize significant features of relational governance in Japanese vertical relationships and to provide an economic rationale. Japanese vertical relationships, particularly in automobile industry, are examined in comparison with those in the U.S. Both buyers and suppliers have recognized the need to be interdependent and have responded by developing bonding mechanisms that build mutual trust. It could reduce transaction costs and enhance efficiency in trading relationships with relationship-specific investments in long-term relationships.

Keywords: Incomplete contracts; Japanese firms; Long-term relationships; Procurement; Relationship specific investment; Vertical relationships (search for similar items in EconPapers)
JEL-codes: L14 L62 (search for similar items in EconPapers)
Date: 1999
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