Keiretsu and relationship-specific investment : implications for market-opening policy

Larry D. QIU, Barbara J. SPENCER

Research output: Working paperWorking paper series


This paper considers the implications of relationship-specific investment within keiretsu for policies aimed at opening the Japanese market for intermediate goods, such as auto parts. Both VIEs applied to parts and VERs restricting Japanese exports of autos cause the keiretsu to import a wider range of parts, but of a relatively unimportant type, such as seat covers. Since keiretsu investment and output fall, the total value of U.S. parts exports may actually fall. For a given value of these exports, a VIE is less costly for U.S. consumers and Japanese producers, but a VER is preferred by U.S. automakers.
Original languageEnglish
PublisherNational Bureau of Economic Research
Number of pages40
Publication statusPublished - May 2001
Externally publishedYes

Publication series

NameNBER Working Paper
PublisherNational Bureau of Economic Research

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