Transactions and cross shareholdings in Mazda's Keiretsu: a centrality

Maintaining symbiotic inter-relationships with suppliers is an integral part of developing tightly interwo- ven vertical supply arrangements among members partici- pating in a network of companies. This article reviews the relevant literature on network theory to test the inter- relationships among transactions, cross shareholdings, and sales among all the fi rms in Mazda's Yokokai Keiretsu. Rooted in graph theory, the degree of betweenness, cross shareholdings, and closeness indicators were used to compute the centrality index, which was then employed to explore the nature of the relationship between transactions and sales, as well as that between cross shareholdings and sales. The fi ndings reveal statistically signifi cant inter-corre- lations between transactions and sales, and between cross shareholdings and sales. Managerial implications are dis- cussed and conclusions are presented.