The source, structure, and stability of control over Japan’s financial sector

This paper assesses our understanding of the centrality of financial institutions in intercorporate networks by examining patterns of ownership ties within Japan’s powerful financial sector. Drawing upon literature on intercorporate networks in Japan and the US, two critical issues are addressed. One, the source and structure of control, and two, what this tells us about change, or lack thereof, in ownership during the turbulent 1990s. Results show that patterns of ownership ties are centralized and stratified, and dominated by a small, cohesive set of financial institutions. Both the source and structure were remarkably stable despite financial crisis. Finally, the sphere of influence crosscut the boundaries of business groups. This paper extends studies of intercorporate relations in Japan and clarifies important similarities and differences with the US.