Capital Financing Strategies of the Japanese Semiconductor Industry

See: Policy Chase Financial , The U.S. and Japanese Semiconductor Industry: A Financial Comparison (San Jose, CA: Semiconductor Industry Association) 1980.

Regarding the impact of Japanese competition on the formation of capital in high technology industries, see McKenna Regis Borrus Michael Cohen Stephen , “Industrial Policy and International Competition in High Technology,” California Management Review, Vol. 26, No. 2 (Winter 1984) 7:15–32.

The financial statistics sighted in this article are based on the parent-company reports of Fujitsu, Ltd.; Hitachi, Ltd.; Mitsubishi Electric Corporation; NEC Corporation; and Toshiba Corporation. These reports are submitted annually to Japan's Ministry of Finance and distributed publicly by Nihon Keizai Shimbun, Inc., through their corporate databank service. While parent-company (or unconsolidated) reporting is not standard practice in the U.S., it is in Japan.

Although consolidated reports are becoming more common among Japan's international blue-chip firms, parent-company reports provide the only means to assess company financial data over a long time period, in this case back to 1966. Because this article is mostly interested in the historical trend in capital structure practices, parent-company data is used. To the extent parent-company and consolidated debt-to-equity ratios differ (if at all) it is a matter of magnitude and not trend.

The debt-to-equity ratios shown in this article represent the ratio of debts bearing interest, less employee savings deposits with the firm, divided by stockholder's equity plus special reserves.

Clark Rodney , The Japanese Company (New Haven, CT: Yale University Press, 1979), p. 8.

For example, Masahiko Aoki states that inter-corporate shareholding is “as high as more than 20%.” It is unclear whether this figure includes shares held by affiliated financial institutions, and it does not reflect employee shareholder associations. See: Aoki Masahiko , “Managerialism Revisited in the Light of Bargaining Game Theory,” International Journal of Industrial Organization, Vol. 1 (1983).

The Ministry's estimates of floating shares are based on the number of shares held by a particular owner or institution. See: Ballon Tomita Usami , Financial Reporting in Japan (Tokyo: Sophia University Press, 1976).

It should be noted that the practice of mutual shareholding became popular among other industrial groups, and not just the major pre-war zaibatsu.

Although the practice of stable shareholding is discussed by a number of Western and Japanese writers, it is described in most detail by Ballon, Tomita, and Usami in Financial Reporting in Japan (Tokyo: Sophia University Press, 1976).

Japan Economic Journal, July 19 and 26, 1983.

The significance of stable relationships between customers and suppliers is described in: Schonberger R.J. Gilbert James P. , “Just-In-Time Purchasing: A Challenge for U.S. Industry,” California Management Review, Vol. 26, No. 1 (Fall 1983): 54–68.