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Impacts of the information-technology revolution on Japanese manufacturer-supplier relationships

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  • Morita, Hodaka
  • Nakahara, Hirohiko

Abstract

'Vertical keiretsu', characterized by suppliers' willingness to make customized investments and their long-term relationships with manufacturers, had been recognized as an important source of strength in Japanese industries. Our model predicts that, in contrast to the recent popular argument, the information-technology revolution can strengthen 'vertical keiretsu'. This is because the efficiency of designing customized parts is significantly enhanced if suppliers undertake a substantial level of IT investments such as the introduction of 3D CAD systems, and the customized nature of such investments could reduce the number of potential suppliers. Our interviews with Japanese manufacturers provide a support to this prediction.
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Suggested Citation

  • Morita, Hodaka & Nakahara, Hirohiko, 2004. "Impacts of the information-technology revolution on Japanese manufacturer-supplier relationships," Journal of the Japanese and International Economies, Elsevier, vol. 18(3), pages 390-415, September.
    • Handle: RePEc:eee:jjieco:v:18:y:2004:i:3:p:390-415
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    Cited by:

    1. Shuhei Nishitateno, 2012. "Global Production Sharing in the Japanese Automobile Industry: A Comparative Analysis," Departmental Working Papers 2012-02, The Australian National University, Arndt-Corden Department of Economics.
    2. Genjiro Kosaka & Koichi Nakagawa & Seiji Manabe & Mizuki Kobayashi, 2020. "The vertical keiretsu advantage in the era of Westernization in the Japanese automobile industry: investigation from transaction cost economics and a resource-based view," Asian Business & Management, Palgrave Macmillan, vol. 19(1), pages 36-61, February.

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    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other

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