Factors influencing the relative industrial performance of Japan, Germany USA and UK

Factors influencing the relative industrial performance of Japan, Germany USA and UK

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INDUSTRIAL PERFORMANCE Factors influencing the relative industrial Part 3 The changing scene and conclusions This is the last of a series of three articles in which the author has explored some of the underlying factors which have continued to influence competitive performance. Part 1 (June 1994) dealt with industrial structure, and capital and investment; Part 2 (Au st 1994) discussed education and training, employment PO !r cies and management practices. by R G. Terry, OBE The changing scene he world decline in trade, which has been influenced by many factors, such as the T deregulation of financial institutions, the collapse of the Soviet Union and the re- unification of Germany, has brought in its wake much change. Since the 1980s, the relationship between Japanese banks and the large manufacturing companies has weakened. By 1990 bank loans to manufacturing businesses had fallen to one- quarter of their previous level as firms began to raise new capital directly.' Banks switched their lending to property companies and households. This drove up the price of land in Japan which in turn provided the collateral for more lending. With consumer spending limited, much of this lending found its way into the booming stock market and into the large manufacturing ENGINEERING MANAGEMENT JOURNAL OCTOBER 1994 companies which were investing more and more in fixed assets at home and abroad. Japan's enormous trade imbalance and the world explosion of debt have resulted in a falling off in market demand for its exports. What were previously only small returns on investment have now turned into losses. Efforts are being made to cut back on investment. Large companies are sharing model ranges and moving out of their own group of suppliers to rationalise components. The smaller suppliers are in turn selling directly abroad. The Japanese government would like to finance a consumer-led recovery, but Japanese households now have a large ratio of debt to disposable income and banks, now that property prices have collapsed, have a mountain of debt with doubtful collateral. The government, under pressure from the 219 Authorized licensed use limited to: UNIVERSITI UTARA MALAYSIA. Downloaded on March 17,2010 at 16:29:24 EDT from IEEE Xplore. Restrictions apply.
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INDUSTRIAL PERFORMANCE USA to normalise its trade balance, could deregulate some parts of the consumer market but it is finding that the large bureaucracy that has created and monitored the regulations intend to fight a rearguard action to protect their own jobs, aided no doubt by a business sector that does not relish the thought of competition. Some of it is so inefficient that removing protection suddenly would quickly escalate The most significant change unemployment. -
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This note was uploaded on 06/19/2011 for the course IT 2254 taught by Professor Adelhassen during the Spring '11 term at Abu Dhabi University.

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Factors influencing the relative industrial performance of Japan, Germany USA and UK

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