ABSTRACT
This chapter examines the business groups by inquiring into what firms belong to which business groups and how they are tied together in forming these groups. It focuses on the associative relationships among firms in analysis of business groups. There have been two methods of measuring interfirm associative relationships. The first of them takes the interlocking share ownership as an indicator. However, the rapidity of postwar economic growth, which has centered on investment expansion, is accompanied by a disproportionate increase in business debt. Accordingly, it has come to be thought that interfirm relationships can be more accurately measured in terms of debt rather than equity. This is the second method of measuring interfirm relationships. The chapter presents a method which will correct the defects of existing methods with regard to the measurement of interfirm relationships, to carry out measurement of interfirm relations, according to this method, and to reveal significant characteristics of Japanese business groups.
