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.
|Number of pages
|Journal of The Japanese and International Economies
|Published - 2011 Jun
- Variance component analysis
ASJC Scopus subject areas
- Economics and Econometrics
- Political Science and International Relations