Market Share Instability and Size Similarity Some Evidences of Behavioral Similarity of the Japanese Firms

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Many　anecdotes　suggest　that　competing　Japanese　firms　tend　to　adopt　similar　behavior．　In this　paper，　we　perform　two　differenuests　to　explore　similarities　in　firm　behavior　and　market structure　in　Japan．　The　first　test　shows　that　firm　sizes　are　more　similar　in　Japan　than　in　the　US， while　there　is　no　difference　in　market　concentration　between　the　two　countries．　The　second　test relates　to　market　share　stability，　which　is　a　proxy　for　similar　behavior．　Prior　studies　have　regarded 　market　share　stability　as　a　result　of　collusion．　If　so，　market　share　stability　should　be　positively correlated　with　market　concentration　which　promotes　collusion．　In　contrast，　if　similar　behavior stems　from　competitive　interaction　and　mimetic　isomorphism，　market　share　stability　should　be positively　correlated　with　firm　size　similarity　reflecting　similarity　of　firm　capabiliIies　and　characteristics． 　W¢find　that　market　share　stability　in　Japan　has　a　strong　and　positive　association　with firm　size　similarity，　while　it　has　no　significant　relationship　with　market　concenIration．　These results　suggest　that　Japanese　firms　tend　to　take　similar　behavior　stemming　not　from　collusion　but from　competition．

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