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The Ownership Structure of Japanese Service Firms: A Study of Parent‐Subsidiary Relationships

Elizabeth L. Rose (Department of International Business, University of Auckland and Australian Centre for International Business, University of Melbourne)
Kiyohiko Ito (School of Business, University of Wisconsin ‐ Madison)

Asia Pacific Journal of Marketing and Logistics

ISSN: 1355-5855

Article publication date: 1 March 1997

Abstract

The relationship between parent firms and their subsidiaries is a crucial aspect of corporate governance, and is increasingly complex in the global environment. We analyze an organizational arrangement quite common in Japan, the corporate spinoff, focusing on the relationship between parent firms in the Japanese service sector and their spinoff subsidiaries. The level of parental ownership is negatively related to the parent firm's net income and number of subsidiaries, but positively related to its advertising expenditures. In addition, parent firms tend to have lower ownership of more profitable subsidiaries. The ownership arrangement between the parent and the subsidiary appears to be based on issues broader than direct profit maximization.

Keywords

Citation

Rose, E.L. and Ito, K. (1997), "The Ownership Structure of Japanese Service Firms: A Study of Parent‐Subsidiary Relationships", Asia Pacific Journal of Marketing and Logistics, Vol. 9 No. 3, pp. 26-39. https://doi.org/10.1108/eb010290

Publisher

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MCB UP Ltd

Copyright © 1997, MCB UP Limited