Listed May 2002
Oyelaran-Oyeyinka, Banji (United Nations University, Institute for New Technologies)
Japanese Corporate Governance: The Hidden Problems of the Corporate Law and Their Solutions
(PDF)

It has long been said that the Japanese corporate governance does not pay sufficient attention to shareholders as the owners of the corporation. And yet, despite this seeming lack of shareholder ownership, Japanese firms have performed quite well until recently. This paper seeks to solve this conundrum by developing the "Company Community" concept as a positive model of the Japanese corporate governance. This model is used to illustrate how the Japanese system of corporate governance solves the hidden problems of the corporate law. These hidden problems of corporate law are common to all developed economies and consist of the dual problems of balancing between monitoring and autonomy of management and balancing between money capital and human capital. The company community concept solves these problems through an intricate system of monitoring consisting of three levels. The first level is the in-house monitoring by core employees who are quasi-residual claimants and monitor management as a participant in the Community. The second level is the monitoring by cross-shareholders in the firm, the main bank in particular. Cross-shareholding also has the effect of stabilizing the management position against outside control. The third level is the monitoring by exit of the outside shareholders. These multiple levels of monitoring have the effect of stabilizing management yet upholding shareholder ownership as the end game norm.

Listed June 2002
John Quigley (University of California at Berkeley)
Real Estate and the Asian Crisis
(PDF)

This paper suggests that activities in the real estate markets in Southeast and East Asian economies were an important contributing force to the financial crises of 1997 in the Asian economies. The analysis relies upon unpublished data reported contemporaneously by financial institutions and market watchers to document the extent of the imbalances in the real property market that were evident to informed observers at the time of the financial collapse. The analysis argues that a series of reforms in the regulation of the property market and the treatment of real property loans by financial institutions are necessary to prevent the recurrence of the kind of speculative bubble that contributed to the financial crises in Asia. Given the recentness of the crisis, the nature of the data and the absence of definitive statistical sources, the results are tentative, but they are certainly consistent with a financial collapse whose proximate cause was unchecked activity in the property market.

Listed June 2002
Oyelaran-Oyeyinka, Banji (United Nations University, Institute for New Technologies)
Manufacturing Response in a National System of Innovation: Evidence from the Brewing Firms in Nigeria
(PDF)

Employing empirical data, this study examines the innovation response of private Nigerian brewing firms to a state-induced crisis. We found that size, ownership, manufacturing skills, and technical affiliation were decisive factors in the innovation success of firms that survived and prospered under a decidedly turbulent industrial environment. State action, which was equally decisive but measured and based on scientific evidence, was accompanied by appropriate incentives and penalties. Firms with superior innovative performance recorded strong economic performance. The large firms with strong technical and financial support from foreign partners were able to tap into wider knowledge bases locally and broad and subsequently prospered.

This article may have implications for the risk management of local vs. foriegn firms in turbulent economic environments in Asia such as the Asian economic crisis of the 1990's, Indonesia's recovery, and anticipating implications for business risk and competitiveness from inevitable economic hiccups in the growth of China. (eds.)

Listed June 2002
James Lincoln (University of California, Berkeley) and Christina Ahmadjian (Columbia University)
Shukko (Employee Transfers) and Tacit Knowledge Exchange in Japanese Supply Networks: The Electronics Industry Case
(PDF)

Purchase-supply relations in Japanese electronics are less close and cooperative than in the automobile industry and involve less formal knowledge sharing. Our interviews with a number of major Japanese electronics firms reveal that suppliers are less involved in manufacturers' product development processes and are brought in at later stages. However, too much attention to such formal knowledge sharing events may blind one to patterns of cross-firm learning and sharing that transfer the most tacit kinds of organizational knowledge, such as the normative and affective elements of a corporate culture. Using interview information, we discuss the phenomenon of shukko (employee transfers) among Japanese companies. Shukko is often viewed as a downsizing device, although firms claim they do it mostly to exchange knowledge with partners. Our view is that it serves both purposes. However, the volume of shukko varies with the electronics firm. It is most common where customers and suppliers are bound to one another in equity and other "keiretsu" relationships. Shukko is an effective mechanism of cross-firm socialization, so we might expect that firms that shukko extensively are also more likely to develop network-wide cultures of obligation and reciprocity. An example supporting that hypothesis is "Kigyo Denki", our pseudonym for a large, old-line electronics company with strong ties to one of Japan's "big-six" horizontal keiretsu groups. However, some companies, such as Matsushita, have a corporate culture that appears to coordinate and motivate suppliers even in the absence of shukko and other keiretsu ties.

Listed June 2002
Michael Kevane (Santa Clara University) and David Levine (University of California, Berkeley)
The Changing Status of Daughters in Indonesia
(PDF)

In many nations, parents exhibit a variety of behaviors that favor sons over daughters. In this paper we provide evidence suggesting that in Indonesia there is no problem of "missing daughters" and that patterns of births, birth spacing and nutrition allocations do not suggest son preference during the cohorts born from 1940's to the 1990's. In contrast, gender differences in educational attainment and inheritance were quite prevalent in the recent past. These gaps have narrowed for secondary education and inheritance, and disappeared for primary education. In many nations, parents exhibit a variety of behaviors that favor sons over daughters. In this paper we provide evidence suggesting that in Indonesia there is no problem of "missing daughters" and that patterns of births, birth spacing and nutrition allocations do not suggest son preference during the cohorts born from 1940's to the 1990's. In contrast, gender differences in educational attainment and inheritance were quite prevalent in the recent past. These gaps have narrowed for secondary education and inheritance, and disappeared for primary education.

Listed May 2002
Hagström, Linus (European Institute of Japanese Studies)
The Rhetoric of Power: Conceptions of Power in the Academic Post-Cold War Japanese Foreign Policy Discourse
(PDF)

The main purpose of this paper is to investigate how scholars have related to the term 'power' in their research of post-Cold War Japanese foreign policy; how they have filled the term with meaning, i.e. how they have associated it with a concept. This is done through an analysis of English and Japanese texts, both those that do not include an explicit definition of the term, but still use it extensively, and those that do define the term and purport to make use of it in empirical research. An analysis of the material shows inconsistency in the sense that power is implicitly understood in terms of resources and capabilities (cf. Realism in International Relations), but explicitly (e.g. in definitions) clearly in relational terms. The way to express power in Japanese, moreover, significantly differs from the English practice; in English there is merely one word - in Japanese several words are used to express the different concepts of power. An interesting feature of Japanese texts, moreover, is the frequent references to 'powerization', i.e. the process of becoming a power.

Listed June 2002
Frambach, R.T. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Agarwal, M.K.; Nijssen, E.J.
Beyond the adoption/ non-adoption dichotomy: the impact of innovation characteristics on potential adopters' transition through adoption process stages
(PDF)

Research on innovation adoption has suffered from a bias towards understanding the factors that affect the dichotomous adoption/non-adoption decision. Much less attention is devoted to the question why potential adopters fail to progress to the adoption stage from earlier stages in the decision making process. Such knowledge is essential to understand what factors actually underlie the non-adoption of an innovation. As perceived innovation characteristics have been found to influence adoption in a substantial way, we develop hypotheses on their influence not only with respect to the adoption stage, but with respect to previous stages of the adoption process as well. Specifically, we develop hypotheses on the perceived levels and importance of relative advantage, compatibility, complexity and perceived risk in the awareness, evaluation, and adoption stages of the innovation adoption process. The hypotheses are tested using both multivariate analysis of variance and multinomial logit modeling on a sample of 242 organizations, focusing on the adoption process of electronic banking. The results show that the levels of perceived relative advantage and compatibility increase over the stages of the adoption process, whereas the perceived levels of complexity and risk largely decrease. The influence of the characteristics across the adoption stages shows that positive beliefs related to the innovation have highest salience in the initial stage of the process, whereas the salience of perceived complexity - generally considered an undesirable attribute - is highest in the final stage. In sum, our results imply that non-adopters are affected by innovation characteristics in a different way, depending on their stage in the adoption process, and therefore should not be considered as one homogeneous group of "potential adopters". These findings have important implications for marketing innovations.

Middle class consumers in Asia, contrary to common belief, do not show any significant resistance to adoption of new technologies and products compared to other regions. However marketing to innovators and early adopters needs to be highly tuned to targeting specific sub groups. This article provides some useful ideas.. (Eds.)

Listed June 2002
Onderstal, S. (Tilburg University, Center for Economic Research)
The Chopstick Auction
(PDF)

(No abstract)