TY  - JOUR
AU  - Spencer,Barbara J.
AU  - Qiu,Larry D.
TI  - Keiretsu and Relationship-Specific Investment: A Barrier to Trade?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7572
PY  - 2000
Y2  - February 2000
UR  - http://www.nber.org/papers/w7572
L1  - http://www.nber.org/papers/w7572.pdf
N1  - Author contact info:
Barbara J. Spencer
University of British Columbia
Sauder School of Business
2053 Main Mall
Vancouver, BC  V6T 1Z2
CANADA
Tel: 604/822-8479
Fax: 604/822-8477
E-Mail: barbara.spencer@sauder.ubc.ca
AB  - This paper develops a model of informal procurement within Japanese keiretsu so as to consider effects on intermediate-good imports, such as auto parts. Parts-suppliers make relationship-specific investments that benefit the auto-maker and prices are determined by bargaining after investment has been sunk. Although this investment raises efficiency, it limits the range of imports to less important parts such as tail pipes and it is possible that no parts are imported, despite lower foreign production costs. Lack of information concerning investment rents combined with counterintuitive effects on imports and Japanese production costs could create unwarranted perceptions of a trade barrier.
ER  -