Once Japanese companies started expanding abroad, they exported their vertical keiretsu
But recent studies suggest emergent American practices differ from traditional Japanese vertical keiretsu
Constand, 2000, "Ownership Structure and Performance of Japanese Firms: Horizontal Keiretsu, Vertical Keiretsu
, and Independents," Review of Pacific Basin Financial Markets and Policies 3, 535-556.
The focus of this study is on the financial performance of first-tier suppliers that are affiliated with a vertical keiretsu
in the Japanese automobile industry in contrast to the mostly descriptive nature of previous studies.
1995] explores whether location of other Japanese firms in a US state or neighboring states by firms of the same vertical keiretsu
affects subsequent FDI for a Japanese MNE.
For example, contingent, project-based contracting in American employment systems may involve limited domination and formal coordination, at least relative to traditional bureaucracies (see Barley and Orr, 1997), while the extent of domination and formal coordination in vertical keiretsu
is quite extensive (Aoki, 1988).
can be explained by emergence of a large manufacturer dominating integrated distribution system.
Some call them horizontal keiretsu and vertical keiretsu
These groups of manufacturers and parts suppliers are often called vertical keiretsu
Subsidiaries of parent companies that belong to a vertical keiretsu
with strong intra-keiretsu supplier relationships also have a higher local content, in particular in ASEAN countries.
Unlike the horizontal keiretsu, the vertical keiretsu
are usually composed of a major industrial corporation and its suppliers or distributors/retailers in a particular industry such as automobiles and electronics.
Third, Japanese companies are closely interrelated in both horizontal and vertical keiretsu
, which means that vertical and horizontal links are not "up for grabs" by foreign investors.