Long-Term Cooperation in Japanese Vertical Relationships

Kenji Kojima

No 106, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

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.

Keywords: Commitment; Cooperation; Reputation; Japanese firms; Long-term relationships; Relationship-specific investment; Vertical relationships (search for similar items in EconPapers)
JEL-codes: L14 L62 (search for similar items in EconPapers)
Pages: 21 pages
Date: 1999-11
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Journal Article: Long-term Cooperation in Japanese Vertical Relationships (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:kob:dpaper:106

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