Abstract
This paper provides an empirical analysis of the choices made by Japanese firms with respect to subcontracting status, that is, whether to take in work as subcontractor, to outsource work to subcontractors, to do both or to do neither. It shows that the probability of working as a subcontractor, a choice made by many small firms in Japan, is negatively related to size, foreign sales and technological capability. Furthermore, profits do not appear to be higher for subcontracting firms; indeed, they are highest for the group that does not get involved in any type of subcontracting, whether as a supplier or as an outsourcer.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Asanuma, Banri, 1989, ‘Manufacturer-Supplier Relationships in Japan and the Concept of Relation-Specific Skill’, Journal of the Japanese and International Economies 3(1), 1–30.
Asanuma, Banri and Tatsuya Kikutani, 1992, ‘Risk Absorption in Japanese Subcontracting: A Microeconometric Study of the Automobile Industry, Journal of the Japanese and International Economies 6(1), 1–29.
Barney, Jay B., 1999, ‘How a Firm’s Capabilities Affect Boundary Decisions’, Sloan Management Review 40(3), 137–145.
Doms, Mark E. and J. Bradford Jensen, 1998, ‘Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States’, in Robert E. Baldwin, Robert E. Lipsey and J. David Richardson (eds.), Geography and Ownership as Bases for Economic Accounting, Chicago: University of Chicago Press.
Fujimoto, Takahiro, 1997, Seisan Shisutemu no Shinkaron: Toyota Jidousha ni Miru Soshiki Nouryoku to Souhatsu Purosesu (Evolutionary Theory of Production System: Organization Capability and Product Development Process of Toyota Automobile Company), Tokyo: Yuhikaku. [In Japanese.]
Kawasaki, Asuo, 1998, ‘Kokumin Keizai to Chuushou Kigyou (The National Economy and SMEs)’, in Keizou Fujita and Masami Takeuchi (eds.), Chuushou Kigyou Ron (The Economics of SMEs), Fourth Edition, Tokyo: Yuhikaku. [In Japanese.]
Kawasaki, Seiichi and John McMillan, 1987, ‘The Design of Contracts: Evidence from Japanese Subcontracting’, Journal of the Japanese and International Economies 1(3), 327–349.
Kooij, Eric van, 1991, ‘Japanese Subcontracting at a Crossroads’, Small Business Economics 3(3), 145–154.
Lyons, Bruce R., 1996, ‘Empirical Relevance of Efficient Contract Theory: Inter-Firm Contracts’, Oxford Review of Economic Policy 12(4), 27–52.
Macneil, Ian R., 1983, ‘Values in Contract: Internal and External’, Northwestern University Law Review 78(2), 340–418.
Maruyama, M, 1996, ‘Kigyou-kan Kankei (Inter-Firm Relationship)’, in Nihon Keizai Jiten (Encyclopedia of the Japanese Economy), Tokyo: Nihon Keizai Shinbun-sha. [In Japanese.]
Miwa, Yoshirou, 1990, Nihon no Kigyou to Sangyou Soshiki (Japanese Firms and Industrial Organization), Tokyo: The University of Tokyo Press. [In Japanese.]
Montalvo, Jose G. and Yishay Yafeh, 1994, ‘A Microeconometric Analysis of Technology Transfer: The Case of Licensing Agreements of Japanese Firms’, International Journal of Industrial Organization 12(2), 227–244.
Monteverde, Kirk and David J. Teece, 1982, ‘Supplier Switching Costs and Vertical Integration in the Automobile Industry’, Bell Journal of Economics 13(1), 206–213.
Nugent, Jeffrey B. and Mustapha K. Nabli, 1992, ‘Development of Financial Markets and the Size Distribution of Manufacturing Establishments: International Comparisons’, World Development 20(10), 1489–1499.
Sato, Yoshio, 1989, ‘Small Business in Japan: A Historical Perspective, Small Business Economics 1(3), 121–128.
SMEA and MITI, 1969, Dai 3 Kai Chuushou Kigyou Sougou Kihon Chousa Houkokusho, 1966 (The 3rd Basic Survey of SMEs, 1966), Tokyo: Zaidan Houji. [In Japanese.]
SMEA and MITI, 1974, Dai 4 Kai Kougyou Jittai Kihon Chousa Houkokusho, 1971 (The 4th Basic Survey of the Industrial Sector, 1971), Tokyo: Zaidan Houji. [In Japanese.]BPS
SMEA and MITI, 1979, Dai 5 Kai Kougyou Jittai Kihon Chousa Houkokusho, 1976 (The 5th Basic Survey of the Industrial Sector, 1976), Tokyo: Zaidan Houji. [In Japanese.]
SMEA and MITI, 1984, Dai 6 Kai Kougyou Jittai Kihon Chousa Houkokusho, 1981 (The 6th Basic Survey of the Industrial Sector, 1981), Tokyo: Shadan Houji. [In Japanese.]
SMEA and MITI, 1990, Dai 7 Kai Kougyou Jittai Kihon Chousa Houkokusho, 1987 (The 7th Basic Survey of the Industrial Sector, 1987), Tokyo: Shadan Houji. [In Japanese.]
Suzuki, Kazuyuki, 1993, ‘R&D Spillovers and Technology Transfer Among and Within Vertical Keiretsu Groups: Evidence from the Japanese Electrical Machinery Industry’, International Journal of Industrial Organization 11(4), 573–591.
Taylor, Curtis R. and Steven N. Wiggins, 1997, ‘Competition or Compensation: Supplier Incentives under the American and Japanese Subcontracting Systems’, American Economic Review 87(4), 598–618.
Tsuchiya, Moriaki and Yoshirou Miwa (eds.), 1989, Nihon no Chuushou Kigyou (SMEs in Japan), Tokyo: University of Tokyo Press. [In Japanese.]
Uekusa, M., 1987, ‘Industrial Organization: The 1970s to the Present’, in K. Yamamura and Y. Yasuba (eds.), The Political Economy of Japan, Stanford: Stanford University Press.
Watanabe, Yukio, 1997, Nihon Kikai Kougyou no Shakaiteki Bungyou Kouzou: Kaisou Kouzou, Sangyou Shuuseki kara no Shitaukesei Haaku (The Structure of Social Division of Labor in the Japanese Machinery Industry: Understanding Subcontracting System from the Viewpoint of Stratified Structure and Industry Agglomeration), Tokyo: Yuhikaku. [In Japanese.]
Williamson, Oliver E., 1979, ‘Transaction-Cost Economics: The Governance of Contractual Relations’, Journal of Law and Economics 22(2), 233–261.
Williamson, Oliver E., 1985, The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting, New York: Macmillan.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2002 Springer Science+Business Media Dordrecht
About this chapter
Cite this chapter
Kimura, F. (2002). Subcontracting and the Performance of Small and Medium Firms in Japan. In: Iqbal, F., Urata, S. (eds) Small Firm Dynamism in East Asia. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-0963-9_9
Download citation
DOI: https://doi.org/10.1007/978-1-4615-0963-9_9
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4613-5326-3
Online ISBN: 978-1-4615-0963-9
eBook Packages: Springer Book Archive