Journal Name: Asian Business & Management: March 2007, Volume 6, Issue 1
Growth and Structural Change in the Japanese Economy 1985–2000: An Input–Output Analysis (pp15–33)
Franz Waldenberger (Japan-Zentrum, Universitat München, Oettingenstr. 67, 80538 München, Germany)
Using data of input–output tables for the Japanese economy for the years 1985, 1990, 1995 and 2000 and applying the methodology of decomposition analysis, this paper investigates the factors that contributed to the growth and structural change in the Japanese economy between 1985 and 2000. In the last sub-period (1995–2000), the contribution to GDP growth shifted from domestic final demand to export demand. The extent of structural change in real terms was in all periods larger than in nominal terms, pointing to a dampening effect of price changes. The decline in GDP growth in the 1990s was accompanied by a pronounced shift in the direction of structural change, affected by the relative strong growth of service industries. The main drivers of structural change were shifts in input–output relations and the degree of vertical integration. Both can be related to outsourcing trends and the resulting growth of service industries. Together with the progressive internationalization of the Japanese economy, these structural changes can be expected to require adjustments in the Japanese business and management system.
Keywords: Japanese economy, structural change, input–output analysis, decomposition analysis
The Social Basis of Developmental Capitalism in Japan: From Post-war Mobilization to Current Stress Symptoms and Future Disintegration (pp35–55)
David Chiavacci (Institute of East Asian Studies, Free University Berlin, Ehrensbergstrasse 26-28, D-14195 Berlin, Germany)
Developmental capitalism is not only a question of a shared vision of economic nationalism and a shared strategy of national growth among economic and political elites, and their cooperation. Its success also depends on the degree of mobilization and integration in the population. Post-war Japan saw little continuity in the social basis of developmental capitalism, which was institutionalized in two steps following the socio-political crisis of 1960. In the first period of 1960–1973, national economic growth was redefined from a project for national greatness depending on individual sacrifice into a path of shared growth towards general well-being. Then, during the late 1970s and 1980s, the social basis was strengthened through the institutionalization of the Japanese way of life. The social basis of developmental capitalism in Japan is showing symptoms of stress. Provided that the current return to growth is not a short-term interlude, these symptoms may be overcome and an adapted version of developmental capitalism reestablished. However, in the medium term, demographic development and the end of general social upward mobility may well lead to a disintegration of the social basis of developmental capitalism.
Keywords: developmental capitalism, Japan, social basis of political economy, equality, socio-economic history, social change
Recent Banking Sector Reforms in Japan: An Assessment (pp57-74)
Max Hall (Department of Economics, Loughborough University, Loughborough, Leics LE11 3TU, UK)
There is widespread agreement that a two-pronged attack, embracing both micro- and macro-economic reform, (eg see Farrant and Markovic, 2003; Kashyap, 2002) is necessary to turn around the fortunes of the Japanese economy. This paper focuses on the former set of initiatives adopted by the authorities in Japan, concentrating on those banking sector reforms implemented since around the year 2000, when the reform programme appeared to enjoy renewed impetus. The paper begins by reviewing the main problems still besetting the Japanese banking industry and responsible for its continued fragility, as exemplified by low profitability, weak capitalization, poor asset quality and excessive credit and market (stock and bond) risk exposure. The main reform initiatives are then identified: the creation of a new financial architecture; the reform of safety net arrangements; the authorities' attempts to speed up the banks' resolution of their non-performing loan problems; the Bank of Japan's share-buying activities; the authorities' quest for the right to engage in 'pre-emptive' capital injections; and recent improvements in corporate governance arrangements. The latter part of the paper is an assessment of these reform initiatives, from an efficiency/cost-effectiveness standpoint, and includes recommendations for further change.
Keywords: Japan, bank reform, regulation and supervision
The Japanese Pharmaceutical Industry in Transition: Has Higher Research Orientation Resulted in Higher Market Value? (pp75–94)
Jörg Mahlich (Austrian Economic Chamber, Wiedner Hauptstr. 63, 1045 Vienna, Austria)
We analyze here the determinants of market value for 34 listed Japanese pharmaceutical companies between 1987 and 1998. During this period, Japanese pharmaceutical firms increased their investments in basic R&D in the process of preparing for international market expansion. We provide evidence that international patents significantly contribute to a firm's market value, expressed in Tobin's q, while publications in the scientific literature do not contribute to this value. In contrast to earlier studies on the US pharmaceutical industry, such as Gambardella (1992), our findings also suggest that in Japan a firm's publications and patents are not inter-related.
Keywords: pharmaceutical industry, Tobin's q, R&D strategy, Japan
Integration Management of Western Acquisitions in Japan (pp95–114)
Fabian J Froesea (Graduate School of Asia Pacific, Waseda University, Nishi-Waseda Bldg. 7F, 1-21-1 Nishi-Waseda, Shinjuku-ku, Tokyo 169-0051, Japan) and Leif E Goeritz (German Centre for Industry and Trade Beijing Co. Ltd, Landmark Tower 2, Unit 1111, 8 North Dongsanhuan Road, 100004 Beijing, People's Republic of China)
In recent years, Japan has seen a sharp increase in foreign cross-border merger and acquisition (M&A) transactions. Among the larger cross-border M&A transactions in Japan, a few multinational companies are already struggling with their acquisitions. In this study, we systematically analyzed and compared the unsuccessful DaimlerChrysler-Mitsubishi acquisition with the successful Renault-Nissan acquisition. We collected secondary data and conducted interviews with both Japanese and foreign managers. Despite some similar starting conditions, these acquisitions developed widely divergent outcomes. In this study, we have focused on post-acquisition integration and separated it into human integration and organizational integration. Findings indicate that human and organizational integration are strongly interwoven in Japan, with human integration being a necessary prerequisite for organizational integration. These findings highlight the importance of the human factor in the success of acquisitions. Active communication, participation, assertive leadership, commitment and the creation of a sense of urgency have been found to facilitate human integration. With regard to organizational integration, the autonomy of the integration management and independence from any keiretsu network have been identified as important factors.
Keywords: mergers and acquisitions, human integration, organizational integration, employee resistance, Japan
(This journal is available online: http://www.palgrave-journals.com/abm)
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