Impacts of the Information-technology Revolution on Japanese Manufacturer-supplier Relationships

Hodaka Morita () and Hirohiko Nakahara
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Hirohiko Nakahara: Ministry of Economy, Trade and Industry

Industrial Organization from University Library of Munich, Germany

Abstract: 'Vertical keiretsu', characterized by suppliers' willingness to make customized investments and their long-term relationships with manufacturers, had been recognized as an important source of strength in Japanese industries. Our model predicts that, in contrast to the recent popular argument, the information-technology revolution can strengthen 'vertical keiretsu'. This is because the efficiency of designing customized parts is significantly enhanced if suppliers undertake a substantial level of IT investments such as the introduction of 3D CAD systems, and the customized nature of such investments could reduce the number of potential suppliers. Our interviews with Japanese manufacturers provide a support to this prediction.

Keywords: Customized investment; Information technology; Japanese firm; Vertical Keiretsu; Subcontracting (search for similar items in EconPapers)
JEL-codes: L29 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2002-08-10
New Economics Papers: this item is included in nep-sea and nep-tid
Note: Type of Document - pdf; pages: 28; figures: included
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Related works:
Journal Article: Impacts of the information-technology revolution on Japanese manufacturer-supplier relationships (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpio:0207009

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