This study examines the nature of interfirm networks among large U.S. and Japanese corporations in order to assess the effects of network affiliation and position on company structure, strategy and performance. The Principal Investigators will collect longitudinal data from published sources on directorship interlocks, trading relationships, debt relationships, and reciprocal shareholding relationships among firms. They will also use published sources to obtain information on internal company organization, size and diversification, and such performance dimensions as profitability, sales growth, and share price. Network analytic techniques will be applied to these data for the purpose of uncovering and comparing structural patterns in U.S. and Japanese business networks. Of central interest is the question of how clusterings uncovered by network analysis correspond to keiretsu (enterprise) groupings in the Japanese economy. Firm level outcome variables of structure, strategy, and performance will be modeled as a function of network position and linkage. The Japanese and U.S. economies appear to differ dramatically in terms of the structural relationships among organizations. There is strong support for the characterization of Japan as a network economy, which relies upon a dense web of social bonds and obligation to manage and coordinate transactions. By employing network theories and methods this study will serve to advance our understanding of such network economies and their competitive advantages relative to the United States.
