Does Keiretsu Ownership Improve or Undermine Corporate Performance? The Case of the Automobile Sector = Verbessern oder verschlechtern Keiretsu-Strukturen die Unternehmensleistung? Eine Fallstudie anhand des Automobilsektors

The purpose of this study is to empirically examine and elaborate on the significance of interfirm corporate networks – the so-called keiretsu – in Japan with regard to improvements of corporate performance in the automobile sector when controlling for other factors such as firm size, firm age, technological intensity, capital expenditure and debt-to-equity ratio. The variation in corporate profitability for the period 1998-2006 is analyzed using the financial data of 193 automobile industry suppliers. The application of Ordinary Least Squares (OLS) with Panel-Corrected Standard Errors (PCSE) verifies that keiretsu membership does not present an incentive for high profitability on its affiliated firms. Corporate performance is positively influenced by technological intensity, labor productivity and sales growth while firm size, firm age and credit worthiness exert a negative impact on the development of corporate profitability.