RESTRUCTURING IN THE GLOBAL ECONOMY - THE CONSEQUENCES OF STRATEGIC LINKAGES BETWEEN JAPANESE AND UNITED-STATES FIRMS

Global corporate restructuring often involves U.S. and Japanese alliance partners in interlinked portfolio choices. This paper develops theory and propositions that study U.S. and Japanese restructuring as a process of strategic choice, and introduces the concept of the restructuring profile. Japanese-U.S. strategic linkages create choices in the form of a call option on portfolio reconfiguration for the Japanese firm, and a put option on financial restructuring for its U.S. partner. While Japanese competition forms an initiating force for U. S. restructuring, it also offers a source of capital for that purpose-a unique situation in which the Japanese firm is a part of both the problem and the solution in its U. S. partner's restructuring.