Cross Shareholdings in Japan: A New Unified Perspective of the Economic System

by Mitsuaki Okabe

Overview

This book focuses on one of the most important features of the contemporary Japanese economy; cross shareholding - or mutual shareholding - between corporations. The book analyses recent trends and the reasons behind these, and discusses the implications for the entire Japanese economic system and highlights relevant public policy.

Mitsuaki Okabe proposes that the dissolution of cross shareholdings has weakened the importance of long-term transactional relationships as seen in the Keiretsu (the 'main bank') practice and employment, and that as a result the character of the economy is now closer to that of the Anglo-American system.

Cross Shareholdings in Japan is a timely book and will be of special interest to academics and researchers of economics, Asian studies and finance, as well as policymakers and those involved either directly or indirectly in the Japanese financial system.

Product Details

ISBN-13:	9781840649765
Publisher:	Edward Elgar Publishing
Publication date:	07/28/2002
Pages:	128
Product dimensions:	6.12(w) x 9.25(h) x (d)

About the Author

Mitsuaki Okabe, Professor, Faculty of International Studies, Meiji Gakuin University, Japan

Table of Contents

Contents: Preface 1. Cross Shareholding as an Underlying Element of the Japanese Economic System 2. Various Forms of Cross Shareholding, and Relevant Statistics 3. Recent Trends of Share Ownership and Structural Changes 4. Factors Behind the ‘Dissolution’ of Cross Shareholding 5. Functions of Cross Shareholding and its Assessment 6. Effects of the ‘Dissolution’ of Cross Shareholding and its Assessment 7. Future Prospects and Required Public Policy 8. Conclusions: Limitations of the Japanese-style Economic System and its Transformation Appendix 1: Shareholding by a Main Bank and the Effectiveness of Corporate Control: The Case of Electrical Machinery Firms in Japan, 1982–1999 Appendix 2: Corporate Control in Germany References Index

Editorial Reviews

'Cross shareholding among major firms and the bank in Japan has long been a central feature of Japanese industrial organisation. As Okabe argues it is not an isolated element in the way in which the Japanese economic system works: it is at the core of the whole system - the structure of the labour market, the way in which the capital market has worked to protect Japanese business against external competition, and the innovation system. Okabe provides a fresh look at the dissolution of corporate and main bank links in Japan leaving open the question of when the changes under way will reach a critical point. This is a valuable up-to-date primer on these important changes in corporate Japanese and the Japanese economic system more generally.'

Peter Drysdale

'Stable holdings of each other's shares have been a significant, distinctive feature of Japanese major industrial companies and financial institutions and an integral component of its economic system of bank-based finance and permanent employment. Recent accelerating decline in stable shareholding thus has important implications for Japan's transition to a market-based system. Mitsuaki Okabe provides useful data and insightful analysis of the rather complex patterns of changing costs and benefits of cross-shareholdings in this important new study, the first of its kind available in English.'

Hugh T. Patrick

Okabe (Keio U. at Shonan Fujisawa, Japan) examines the development of mutual shareholding between Japanese corporations. Trends of cross- shareholding are statistically documented and the factors for developments of this system are explored. These relationships are to be understood, he argues, as a fundamental characteristic of the Japanese economic system. The implications of these characteristics for the Japanese economy and the trends towards dissolution of cross- share holding are examined. Annotation c. Book News, Inc., Portland, OR (booknews.com)

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