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Management article
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Reference no. 90302
Authors: Robert L Cutts
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1990

Abstract

Land value inflation has become a vehicle for Japanese companies to use in pursuing global competitive objectives. Land value is whatever the Japanese decide it is, and this gives them economic power from the ground up. The convergence of three forces - Japan''s lagging investment in infrastructure, its promise to its trading partners to stimulate domestic demand, and the rise in the value of the yen following the Plaza Accord of 1985 - has led to virtual government sponsorship of the Japanese land boom. Access to capital is the ultimate advantage in global competition. In part because of their land bubble, the Japanese enjoy the best and cheapest access to capital.

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Abstract

Land value inflation has become a vehicle for Japanese companies to use in pursuing global competitive objectives. Land value is whatever the Japanese decide it is, and this gives them economic power from the ground up. The convergence of three forces - Japan''s lagging investment in infrastructure, its promise to its trading partners to stimulate domestic demand, and the rise in the value of the yen following the Plaza Accord of 1985 - has led to virtual government sponsorship of the Japanese land boom. Access to capital is the ultimate advantage in global competition. In part because of their land bubble, the Japanese enjoy the best and cheapest access to capital.

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