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- W49616446 abstract "INTRODUCTION The early-morning sun shone brilliantly on the four American warships as they lay at anchor in Yedo Bay . . . . The weather was perfect, the seal calm, and even the warships looked tranquil. . . . . Aboard his flagship, Commodore Matthew Calbraith Perry, Commander-in-Chief of U.S. Naval Forces in the Far East, . . . was about to land on Japanese soil to . . . break a centuries-old isolation by the Japanese of their island empire. (1) T. Boone Pickens' unsuccessful attempt to obtain a seat on the board of directors of Koito Co., after becoming Koito's largest shareholder, became a source of trade friction between the United States and Japan. (2) Pickens has portrayed himself as a modern-day Commodore Perry, and his experience has focused attention on impediments to foreign investment in Japan (3) which may set forth events leading to their removal. However, the analogy between Pickens and Commodore Perry is imperfect, since Pickens has been unable to achieve his immediate goal of obtaining a position on Koito Co.'s board, and because his efforts have not effected any increased access to Japanese markets for foreign investors. (4) T. Boone Pickens' experience illustrates the importance of the structural barriers to foreign trade in Japan which have become a focus of the U.S.-Japan economic relationship. (5) Removing these structural impediments is problematic because, in effect, the U.S. is seeking the removal of the same obstacles that Japanese nationals must contend with in their domestic transactions. (6) Even a Japanese commentator has noted that hostile takeovers in Japan are an ineffective strategy for investors to acquire corporate control. (7) However, non-hostile acquisitions are a potentially effective means for foreign investors to enter the Japanese market. (8) In July 1989, the United States and Japan entered into a series of talks entitled the Structural Impediments Initiative (SII) to explore the structural causes of the trade imbalance. (9) The final report of the SII, jointly issued by U.S. and Japanese officials in June 1990, identified several aspects of the Japanese system that restrict market access for non-Japanese companies. (10) The SII report also provided that each country would take concrete steps to resolve structural barriers to trade within its borders. (11) Despite the existence of structural barriers, the Japanese market remains attractive to foreign investors. (12) One survey of foreign executives in Japan found that several factors motivated their decision to locate in Japan, including: the potential for future growth, the desire for a presence in Asia, the desire for access to technology and materials, the relative lack of established competition in certain sectors, the relatively low labor costs, and the access to financial resources in Japan. (13) For foreign investors seeking to establish a business presence in Japan, it is generally advantageous to acquire existing Japanese companies. (14) An established firm typically has in place: experience employees; valuble technology; physical plant and land; an established relationship with suppliers banks and distributors; and existing permits and authorizations. (15) In addition, Japanese companies are often good investments since they are typically highly leveraged relative to U.S. companies, and therefore offer more asset value per dollar invested. (16) Although foreign investors remain wary of impediments to acquiring Japanese companies, merger activity in Japan has increased. (17) Moreover, as Japanese financial companies gain experience abroad, they may become more willing to participate in takeovers at home. In fact, the number of mergers in Japan during 1988 has been estimated at 1,000. (18) In recent years, non-Japanese have increased their shareholdings in Japanese companies, (19) but questions remain about whether stock ownership confers the ability to participate in the management of Japanese companies. …" @default.
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- W49616446 date "1991-03-22" @default.
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- W49616446 title "Foreign Investment and Corporate Control in Japan: T. Boone Pickens and Acquiring Control through Share Ownership" @default.
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