Transactions and cross shareholdings in Mazda's Keiretsu: A centrality analysis

Maintaining symbiotic inter-relationships with suppliers is an integral part of developing tightly interwoven vertical supply arrangements among members participating in a network of companies. This article reviews the relevant literature on network theory to test the interrelationships among transactions, cross shareholdings, and sales among all the firms 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 findings reveal statistically significant inter-correlations between transactions and sales, and between cross shareholdings and sales. Managerial implications are discussed and conclusions are presented.