The Keiretsu Issue

There have been voices heard pointing out the importance of transactions among firms within an industry as a source of the international competitiveness of Japanese firms in recent years. At the same time, the issue of such a business transaction system, in particular its exclusivity, has come to be discussed internationally in the form of the "keiretsu issue." In concrete terms, industries such as automobiles and electric machinery are the subject of this debate. Here, we would like to view the keiretsu issue from the standpoint of economic theory and examine its effectiveness and problems.