Cross-national comparisons are complicated by institutional differences in accounting practices (some of which underrepresent equity and overrepresent debt values in Japan), but estimates even after adjustment suggest that these rates are somewhere around 65%.
3.
OkimotoDaniel I.SuganoTakuoWeinsteinFranklin B., Competitive Edge: The Semiconductor Industry in the U.S. and Japan (Stanford, CA: Stanford University Press, 1984), p. 141. The reliance on borrowed capital in Japan is high even in comparison with that for European countries. Futatsugi, using a different data base, finds that for the period 1967–1972, Japanese firms borrowed on average 15.9% more of their total capital than did French firms, 20.3% more than did West German firms, and 23.2% more than did British firms. FutatsugiYuusaku, Gendai Nihon no Kigyo Shudan - Dai-Kigyo Bunseki o Mezashite [Enterprise Groups in Contemporary Japan: Focusing on an Analysis of Large Firms] (Tokyo: Toyo Shinposha, 1976), p. 33, Table 1.9.
4.
AdamsT.F.M.HoshiiIwao, A Financial History of the New Japan (Tokyo: Kodansha International, Ltd., 1972).
5.
Where firms' debt capital had accounted for only 10% of total capital in the 1930s, it rose to over 50% in the 1950s. Meanwhile, equity as a portion of external capital declined during the postwar period, from 39% to only 8% in the 1950s. GoldsmithRaymond A., The Financial Development of Japan, 1868–1977 (New Haven, CT: Yale University Press, 1983), pp. 143 ff.
6.
For statistics, see AokiMasahiko, “Aspects of the Japanese Firm,” in AokiMasahiko, ed., The Economic Analysis of the Japanese Firm (Amsterdam: North-Holland, 1984), pp. 9–11.
7.
ClarkRodney, The Japanese Company (New Haven, CT: Yale University Press, 1979), p. 8.
8.
Aoki, op. cit.
9.
MintzBethSchwartzMichael, The Power Structure of American Business (Chicago, IL: University of Chicago Press, 1985), p. 97.
10.
Kosei Torihiki Iinkai [Japanese Federal Trade Commission], “Shuyo Dai-Kigyo no Kabushiki Shoyu no Jokyo ni Tsuite” [On the State of Stock Ownership of Important Large Companies], 1983.
11.
Futatsugi, op. cit.
12.
Quoted in Oriental Economist (March 1961), p. 143.
13.
Business Week, October 15, 1984, pp. 44–47.
14.
CoaseRonald H., “The Nature of the Firm,”Economica (1937), pp. 386–405; WilliamsonOliver E., Markets and Hierarchies: Analysis and Antitrust Implications (New York, NY: Free Press, 1975); ChandlerAlfred D., The Visible Hand: The Managerial Revolution in American Business (Cambridge, MA: Harvard University Press, 1977).
15.
Recent empirical evidence suggests that employment relationships in even medium and smaller Japanese firms are considerably more stable than their U.S. counterparts. Hashimoto and Raisian find that average eventual employee tenure in medium and larger Japanese firms is about 50% higher than in the U.S., while that in the smallest Japanese firms is about double that in the smallest U.S. firms.
16.
See PascaleRichardRohlenThomas, “The Mazda Turnaround,”Journal of Japanese Studies (1983).
17.
See JensenMichael C.MecklingWilliam H., “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure,”Journal of Financial Economics (1976), pp. 305–360, and FamaEugene F.JensenMichael, “Separation of Ownership and Control,”Journal of Law and Economics (1983), pp. 301–326, for theoretical discussions of the “agency costs” of bringing the divergent interests of management and investors in line.
18.
AbegglenJames C.StalkGeorgeJr., Kaisha: The Japanese Corporation (New York, NY: Basic Books, 1985).
19.
Pascale's study of Honda's early failures in the U.S. market quite convincingly punctures the myth of the omniscient Japanese strategist, while pointing out the importance of perseverance in markets. PascaleRohlen, op. cit.
20.
Calculated form data provided in Industrial Groupings in Japan (Tokyo: Dodwell Marketing, 1982).
