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An International Perspective of Japan's Corporate Groups and Their Prospects
Yafeh, Yishay - 2010
This paper reviews the literature on corporate groups in Japan and elsewhere, and offers a comparison of Japan's corporate groups with groups in other developed and developing countries. It then proceeds to examine the evolution of corporate groups in Japan since the mid-1970s. The main...
Persistent link: https://www.econbiz.de/10012762884
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Business Groups and the Incorporation of Firm-Specific Shocks into Stock Prices
Faccio, Mara - 2019
In lower-income economies, stocks exhibit less idiosyncratic volatility and business groups are more prevalent. This study connects these two findings by showing that business group affiliated firms' stock returns exhibit less idiosyncratic volatility than do the returns of otherwise similar...
Persistent link: https://www.econbiz.de/10012869223
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Conglomerate Industry Choice and Product Differentiation
Hoberg, Gerard - 2011
conglomerates are most likely to operate and to understand conglomerate valuations. We find that conglomerates are more likely to … opportunities "between" them. Conglomerate firms have lower stock market valuations than matched single-segment firms when their … products are easier to replicate with single-segment firms. Conglomerate firms have stock market premiums when they have higher …
Persistent link: https://www.econbiz.de/10013122462
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Keiretsu and Relationship-Specific Investment : A Barrier to Trade?
Spencer, Barbara J.; Qiu, Larry D. - 2021
This paper develops a model of informal procurement within Japanese keiretsu so as to consider effects on intermediate-good imports, such as auto parts. Parts-suppliers make relationship-specific investments that benefit the auto-maker and prices are determined by bargaining after investment has...
Persistent link: https://www.econbiz.de/10013240947
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Trade and Search : Social Capital, Sogo Shosha, and Spillovers
Rauch, James E. - 2022
A network/search view of international trade in differentiated products is proposed. It is shown that this view can explain the importance of ethnic and extended family ties in trade, the success of diversified trading intermediaries such as Japan's sogo shosha, and the ubiquity of government...
Persistent link: https://www.econbiz.de/10013322117
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Internal Versus External Capital Markets
Gertner, Robert H. - 2010
This paper presents a framework for analyzing the costs and benefits of internal vs. external capital allocation. We focus primarily on comparing an internal capital market to bank lending. While both represent centralized forms of financing, in the former case the financing is owner-provided,...
Persistent link: https://www.econbiz.de/10013139878
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The Dark Side of Internal Capital Markets : Divisional Rent-Seeking and Inefficient Investment
Scharfstein, David S. - 2008
We develop a model that shows how rent-seeking behavior on the part of division managers can subvert the workings of an internal capital market. In an effort to stop rent-seeking, corporate headquarters will be effectively forced into paying bribes to some division managers. And because...
Persistent link: https://www.econbiz.de/10012774955
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Business Groups and Trade in East Asia : Part 1, Networked Equilibria
Feenstra, Robert C.; Huang, Deng-Shing; Hamilton, Gary G. - 2021
We propose an economic model of business groups that allows for the cooperative behavior of groups of firms, where the number and size of each group is determined endogenously. In this framework, more than one configuration of groups can arise in equilibrium: several different types of business...
Persistent link: https://www.econbiz.de/10013217600
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An Analysis of Divisional Investment Policies
Shin, Hyun-Han - 2008
This paper investigates the divisional investment policies of diversified firms. We find that investment of the smallest division of diversified firms is significantly related to the cash flow of the other segments. We then show that the smallest division's investment is more sensitive to the...
Persistent link: https://www.econbiz.de/10012774975
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The Cost of Diversity : The Diversification Discount and Inefficient Investment
Rajan, Raghuram G. - 2006
In a simple model of capital budgeting in a diversified firm where headquarters has limited power, we show that funds are allocated towards the most inefficient divisions. The distortion is greater the more diverse are the investment opportunities of the firm's divisions. We test these...
Persistent link: https://www.econbiz.de/10012783969