Japanese horizontal keiretsu and the performance implications of membership
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AbstractOur study investigates the effect of Japanese horizontal keiretsu group membership on firm risk and return. Like prior studies, our results show that horizontal keiretsu membership has a negative effect on firm profitability. However, we find that horizontal keiretsu networks are likely to increase the gap between targeted and realized returns, which we call the outcome-aspiration gap. Moreover, in contrast to prior studies, our results indicate that keiretsu membership does not enable member firms to reduce risks by smoothing profitability. Instead, our findings provide evidence that is counter to the conventional notion that Japanese horizontal keiretsu allows their member firms to trade off profits for reduced risk. © Springer Science+Business Media, LLC 2006.
All Author(s) ListIsobe T., Makino S., Goerzen A.
Journal nameAsia Pacific Journal of Management
Volume Number23
Issue Number4
PublisherNational University of Singapore
Place of PublicationSingapore
Pages453 - 466
LanguagesEnglish-United Kingdom
KeywordsHorizontal keiretsu, Performance, Risk sharing

Last updated on 2020-19-10 at 01:41