European Journal of Scientific Research - EuroJournals

European Journal of Scientific Research
ISSN 1450-216X Vol.20 No.2 (2008), pp.297-301
© EuroJournals Publishing, Inc. 2008
http://www.eurojournals.com/ejsr.htm
U.S. and Japanese Electronic and Electrical Equipment
Manufacturing Firms: A Comparison
Ilhan Meric
Professor of Finance, Rider University Lawrenceville, N.J. 08648, U.S.A
Charles W. McCall
Associate Professor of Economics
Rider University Lawrenceville, N.J. 08648, U.S.A
Gulser Meric
Professor of Finance, Rowan University, Glassboro, N.J. 08028, U.S.A
Abstract
In this study, we compare the financial characteristics of U.S. and Japanese
electronic and electrical equipment manufacturing firms using the Multivariate Analysis of
Variance (MANOVA) method with data drawn from the DISCLOSURE database for the
December 31, 2001-December 31, 2005 period. The multivariate test statistics indicate that
the overall financial characteristics of U.S. and Japanese firms are significantly different.
The univariate test statistics show that U.S. firms have significantly higher inventory
turnover, whereas Japanese firms have significantly higher total assets turnover. U.S. firms
have significantly higher liquidity and equity levels. These results imply that Japanese
firms have significantly higher liquidity risk and financial risk compared with U.S. firms.
The profitability ratios of firms in the two countries are not significantly different.
Keywords: U.S. and Japanese Electronic/Electrical Equipment Manufacturing Firms,
Financial Characteristics, MANOVA
JEL Classification Codes: F36, G30, L60, M10
1. Introduction
Comparing the financial characteristics of firms in different countries has become a popular research
topic. Meric and Meric (1994) compare the general financial characteristics of U.S. and Japanese
manufacturing firms. Meric, Ross, Weidman, and Meric (1997) compare the financial characteristics of
U.S. and Japanese chemical firms. Meric, Weidman, Welsh, and Meric (2002) compare the financial
characteristics of U.S., EU, and Japanese manufacturing firms. Meric, Gishlick, McCall, and Meric
(2003) compare the financial characteristics of U.S. and Canadian manufacturing firms. The objective
of this study is to compare the financial characteristics of U.S. and Japanese electronic and electrical
equipment manufacturing firms.
Japan is a major trading partner of the U.S. U.S. exports to Japan have increased from $53
billion in 1994 to $55.4 billion in 2005. During the same period, Japanese exports to the U.S. have
increased from $119 billion in 1994 to $138 billion in 2005. There is fierce competition between U.S.
firms and Japanese firms to capture a greater market share in each other's local markets and in the