Arthur Alexnder tells us:
I attribute
over-investment to weak corporate governance (that is, insufficient attention to shareholders). I am willing to entertain alternative explanation

for over-investment read 'more than American companies'
for "weak" read "less dominated by shareholders, giving managers more discretion than in America"
for "insufficient" read, "failing to give as much priority to shareholders as American norms require",

I remember being at a conference with a wise old Swedish economist (Lindeman? He later became finance
minister) explaining why capital/output ratios tended to rise with increasing prosperity. Workers demand higher wages, so that they can furnish their homes.
And then, when they've all got sofas at home they start wanting to have sofas in the office too. Maybe wanting to provide decent work conditions for everybody in the company has something to do with Japanese investment rates too.

I hold no brief for Japanese managers and am an acknowledged non-shinnichika, but I find the criticisms of Japanese managerial incompetence which appear on these pages, just a teeny bit ethnocentrically self-righteous.

Ronald Dore