Horizontal Keiretsu

Horizontal Keiretsu

In Japan, a number of independent but related companies centered on and financed by a single bank and/or a joint stock company. A horizontal keiretsu is essentially a diversified conglomerate; that is, it may have companies in several completely unrelated industries so as to reduce the risk of loss if one industry or other has a bad year. A horizontal keiretsu is thought to promote sustainability over quick profits; however, critics of this system contend that it is inefficient.
Mentioned in ?
References in periodicals archive ?
l0 Consistent with Weinstein and Yafeh (1995) and Wu and Xu (2005), firms are classified as being affiliated with a keiretsu if they are members of the six largest horizontal keiretsu groups, namely, DKB, Fuyo, Mitsubishi, Mitsui, Sanwa, and Sumitomo.
The President Council membership of the six major corporate groups was used to identify horizontal keiretsu members.
11) Horizontal keiretsu are groups of firms across a wide range of industries, typically centered around a main bank that owns significant shares in these firms.
Other studies have considered the impact of horizontal keiretsu on Japanese FDI activity.
Stock companies that belong to one of six horizontal keiretsu groups have lower expenses and lower levels of free cash flow than independent stock and mutual insurance companies.
For example, one chapter in the book describes the fact that keiretsu-affiliated firms participate in wealth transfers from industrial keiretsu affiliates to the financial sector, namely, main banks at the center of horizontal keiretsu arrangements.
At first, the uninitiated reader is tempted to lump organizational arrangements across these contexts--new-economy startups in Silicon Valley, intra-enterprise partnerships in Budapest, horizontal keiretsu in Japan--into the common mold of "network" forms of organization.
Horizontal keiretsu may usually be comprised of several diverse industries such as commercial banks, trust banking, life insurance, and trading company.
First is a horizontal keiretsu which as explained, are groups of large firms in different industries.
The horizontal keiretsu are deeply involved in services such as banking, insurance, transport and trading.
The horizontal keiretsu are usually organized around a bank and consist of a variety of companies that perform different functions in diverse fields[26].

Full browser ?