Most of what we collectively think we know about the Japanese economy is urban legend. In fact -- * The keiretsu do not exist, and never did. An entrepreneurial "research institute" in the 1950s created the rosters to sell to Marxist economists looking for the "monopoly capital" that their...

Although reformers often claim Japanese firms appoint inefficiently few outside directors, the logic of market competition suggests otherwise. Given the competitive product, service, and capital markets in Japan, the firms that survive should disproportionately be firms that tend to appoint...

In 1985, Demsetz and Lehn argued both that the optimal corporate ownership structure was firm-specific, and that market competition would drive firms toward that optimum. Because ownership was endogenous to expected performance, any regression of profitability on ownership patterns would yield...

Observers of modern transitional economies urge firms there to ignore stock markets. Stock markets simply will not work in such environments, they explain. Firms should instead rely on debt finance, particularly bank debt. Only then will they be able to keep principal-agent (i.e.,...

Several years have passed since the 'store wars' over barriers to foreign products at Japanese distribution firms. Yet among English-speaking readers, how these firms operate remains a puzzle. In this book, the best Japanese scholars in their fields attempt to unravel that puzzle. Avoiding...

<DIV>For Western economists and journalists, the most distinctive facet of the post-war Japanese business world has been the <I>keiretsu,</I> or the insular business alliances among powerful corporations. Within <I>keiretsu</I> groups, argue these observers, firms preferentially trade, lend money, take and receive...</i></i></div>

Despite the many economic studies documenting the problems governments face in trying to control or guide economic growth, the literature on postwar Japan posits an exception: during the first three years after World War II, the Japanese government (working with the Allied occupation)...

In 1985, Demsetz & Lehn argued both that the optimal corporate ownership structure was firm-specific, and that market competition would drive firms toward that optimum. Because ownership was endogenous to expected performance, they cautioned, any regression of profitability on ownership patterns...

In a series of pathbreaking articles, Sylla argues that successful economies experience "financial revolutions" before they undergo their periods of rapid growth. In turn, governments generate these revolutions by putting public finance in order, and thereby giving private investors the...

The Japanese "main bank system" figures prominently in the recent literature on "relationship banking." By most accounts, the main bank epitomizes relationship finance: traditionally, every large Japanese firm had one, and that bank monitored the firm, participated in its governance, acted as...