What drives the profitability of Japanese multi-business corporations? A variance components analysis

Yoshitaka Fukui, Tatsuo Ushijima

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

This article decomposes the business-level profit rate of Japanese multi-business corporations by performing a variance components analysis on a large sample of publicly traded non-financial firms in 1998-2003. Consistent with US evidence, estimation results demonstrate that profitability is predominantly determined by business-level factors, not corporate-level ones, suggesting that a typical multi-business corporation in Japan is a combination of relatively distinct businesses in terms of profit.

Original languageEnglish
Pages (from-to)1-11
Number of pages11
JournalJournal of The Japanese and International Economies
Volume25
Issue number2
DOIs
Publication statusPublished - 2011 Jun 1

Keywords

  • Diversification
  • Japan
  • Profitability
  • Variance component analysis

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

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