Japan's economy has long been described as network-centric. A web of stable, reciprocated relations among banks, firms, and ministries, is thought to play an important role in Japan's ability to navigate smoothly around economic shocks. Now those networks are widely blamed for Japan's faltering competitiveness. This book applies structural sociology to a study of how the form and functioning of this network economy has evolved from the prewar era to the late 90s. It asks whether, in the face of deregulation, globalization, and financial disintermediation, Japan's corporate networks - the keiretsu groupings particularly - have 'withered away', losing their cohesion and their historical function of supporting member firms in hard times. Using detailed quantitative and qualitative analysis, this book's conclusion is a qualified 'yes'. Relationships remain central to the Japanese way of business, but are much more subordinated to the competitive strategy of the enterprise than the network economy of the past.

‘Finally, we have an authoritative treatment of how network coordination at the top of the Japanese economy evolved to such prominence and adapted to external change. Lincoln and Gerlach clarify a new balance in the Japanese economy between market forces and inter-firm obligation. I particularly enjoyed their description of cohesive networks fostering a hubris that encouraged risky financial behavior and learned from their extended concluding chapter on the historical context for what is to come in Japan. I put this one on my shelf right next to Regional Advantage and The Second Industrial Divide.’

Ronald S. Burt - Graduate School of Business, University of Chicago

‘The literature on Japan’s corporate networks has reached full maturity with Japan’s Network Economy. In many ways a sequel to Gerlach’s Alliance Capitalism and Lincoln’s earlier journal publications, this book represents scholarship at its best - combining qualitative evidence with formal network analysis applied thoroughly, for the first time, to both horizontal and vertical keiretsu structures. The result is a compelling story about a subtle, but real, transformation in Japan’s corporate network landscape.’

Mari Sako - Said Business School, University of Oxford