The Comparative Features and Economic Role of Mergers and Acquisitions in Japan

The Japanese economy is in the midst of a major merger and acquisition (M&A) wave for the first time in the postwar period. This paper puts a spotlight on Japan's M&A activity, which has surged since the end of 1999, and takes a look at the factors that have contributed to the surge, and its various economic dimensions. The paper places Japan's M&As in an international context, and identify the causes of the wave and its structural characteristics (sections 2 and 3). It also examines the economic role of M&A and its pros and cons. We contend that M&As contribute to raising the efficiency of resource allocation and organizations (sections 4 and 5). The last section addresses policy implications and contains concluding remarks.