Chapter

Business Groups

Hiroyuki Odagiri

in Growth through Competition, Competition through Growth

Published in print May 1994 | ISBN: 9780198288732
Published online November 2003 | e-ISBN: 9780191596711 | DOI: http://dx.doi.org/10.1093/0198288735.003.0007
 Business Groups

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The difference between business groups today (kigyo‐shudan, also called horizontal keiretsu) and their predecessors before the war, zaibatsu, is emphasized. Unlike the zaibatsu, in which the group holding company controlled many firms through majority shareholdings and acted as the central decision‐making unit, present‐day groups are loose combinations of independent companies with equal power. To substantiate this argument, the structure and activity of kigyo‐shudan is discussed in detail. A comparative study of the performance, in terms of profitability, stability, and growth, of group members and nonmembers gives some, albeit weak, evidence to support the hypothesis that the groups contributed to growth and mutual insurance until 1971. However, this evidence does not hold any more after 1974.

Keywords: growth; holding company; insurance; keiretsu; kigyo‐shudan; shareholding; zaibatsu

Chapter.  11116 words.  Illustrated.

Subjects: Business and Management

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