Partial ownership arrangements in the Japanese automobile industry; 1990-2000

Hiroshi Ono, Takuya Nakazato, Colin Davis and Wilson Alley
Additional contact information
Hiroshi Ono: Hokkaido University, http://www.econ.hokudai.ac.jp/en/
Takuya Nakazato: Hokkaido University, http://www.econ.hokudai.ac.jp/en/
Wilson Alley: Tohoku-Gakuin University, http://www.tohoku-gakuin.ac.jp/old_tg/index.html

Journal of Applied Economics, 2004, vol. 7, 355-367

Abstract: The end of the 1990Â’s saw a number of foreign automobile manufacturers become the largest shareholders in several Japanese automobile manufacturers. It seems logical to conclude that a firm only enters into a partial ownership arrangement (POA) if it is profit maximizing. However, research to date has treated POAs as if exogenous to the model. This paper develops a model that assumes POAs are determined endogenously. Data for the Japanese automobile industry are then used to investigate the factors that determine whether a firm enters into a POA, and the effects a POA has on the price-cost margin. The findings of this paper suggest that while both foreign and domestic firms take an interest in product mix when exploring POAs in the Japanese market, they have differing profit incentives. Furthermore, the level of ownership has a positive effect on POAs.

Keywords: partial ownership arrangements; price-cost margin; technology transfers (search for similar items in EconPapers)
JEL-codes: L0 L6 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (16)

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Journal Article: Partial ownership arrangements in the Japanese automobile industry; 1990-2000 (2004)
Journal Article: Partial Ownership Arrangements in the Japanese Automobile Industry; 1990 - 2000 (2004)
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