Faculty Scholarship 1994 - Present
Comparison of the Financial Characteristics of Japanese Keiretsu-Affiliated and Independent Firms
The Japanese financial keiretsu system has received considerable attention in the US business literature. A number of studies have investigated various aspects of the financial keiretsu practice in Japan and the impact of this system on the financial characteristics of Japanese firms. However, there are no studies that compare the overall financial characteristics of the keiretsu-affiliated firms and the independent firms. We found that although the independent firms have significantly higher operating profit margin and return on assets ratios, the return on equity ratios of the two groupw of firms are not significantly different. There are considerable similarities between the two groups of firms in terms of turnover ratios, growth ratios, and market ratios.