June 30, 2006

'The Fable of the Keiretsu: Urban Legends of the Japanese Economy'

By NINA C. AYOUB

In Japan, the keiretsu are conglomerates in which allied businesses use cross-shareholding and other cooperative schemes to protect their collective interests. Although in decline in recent years, keiretsu like the Fuji, Mitsui, and Sumitomo groups were long fabled for their power in the Japanese economy.

That's a problem, say Yoshiro Miwa, a professor of economics at the University of Tokyo, and J. Mark Ramseyer, a professor of Japanese legal studies at Harvard Law School. Because,