Keiretsu

Summary of Keiretsu

A loose coalition of Japanese businesses, usually with equity holdings in one another. The group of companies may span several industries, and strict parent-subsidiary relationships are not usually evident. Mitsubishi, Mitsui, and Yasuda are representative of Japanese keiretsu. The keiretsu coalitions emerged in the 1950s in a reformed industrial policy following the post- World War II unbundling of the highly structured Zaibatsu (read this and related legal terms for further details) cartels.

(Main Author: William J. Miller)

Keiretsu in relation with International Trade

In the context of trade organizations, Christopher Mark (1993) provided the following definition of Keiretsu: Major industrial groups or combines in Japan. “Horizontal” keiretsu –some descended from pre-World War II zaibatsu –consist of affiliated companies in diverse fields. The six principal horizontal keiretsu are Mitsubishi, Sumitomo, Mitsui, Sanwa, Fuyo, and Dai Ichi Kangyo; most of Japan’s largest corporations are linked to one or another of these groups. “Vertical ” keiretsu consist of a network of suppliers and distributors centered around a single, large firm. See also sogo shasha.

Keiretsu in International Trade

Meaning of Keiretsu, according to the Dictionary of International Trade (Global Negotiator): The horizontally and vertically linked industrial structure of Japan’s private economy. Horizontally linked groups include a broad range of industries linked by banks and trading companies. Vertically linked groups are centered around parent companies, with subsidiaries frequently serving as suppliers, distributors and retailers. See also sogo shoshas.