Ownership Structure and Performance of Japanese Firms: Horizontal Keiretsu, Vertical Keiretsu, and Independents

Mel Jameson, Michael J. Sullivan and Richard L. Constand
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Mel Jameson: University of Nevada, Las Vegas, USA
Michael J. Sullivan: University of Nevada, Las Vegas, USA
Richard L. Constand: University of West Florida, USA

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2000, vol. 03, issue 04, 535-556

Abstract: Financial economists have devoted substantial effort to describing and analyzing the governance structures of the Japanesekeiretsu, or business groups, to explain how their features serve to improve group performance. The governance mechanisms described provide an informative contrast to the market based monitoring mechanisms of the Anglo-American governance system. In this paper we compare the performance of Japanesekeiretsumember firms with that of independent Japanese firms, whose governance structure is more market based. We also compare the performance of different types ofkeiretsugroup members. Two results emerge. First, we find no support for the hypothesis that the overall set of governance structures ofkeiretsufirms are more effective at maximizing shareholder wealth than are those of independents. In addition, we document significant performance differences among different types of group member firms.

JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S0219091500000261

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