CHAPTER NINE
Japan’s Great Postwar Weapon
“WHAT MAKES JAPAN SUCCEED?” is the hottest discussion topic today. But what few mention is Japan’s cost of capital.
American and other Western companies pay between 10 percent and 15 percent for money, whether short-term borrowings, fixed debt, or equity. The large Japanese firm has been paying 5 percent at most. And a capital-cost advantage of 200 percent or 300 percent is almost unbeatable. Neither “culture” nor “structure”—the factors most often invoked to explain Japan’s success—underlie Japan’s low cost of capital. The American Occupation gave it to Japan, 40 years ago.
It’s common knowledge that ...
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