Japanese MNEs Research Articles

Japanese Multinational Enterprises: The Paradox of High Efficiency and Low Profitability

The fundamental characteristic of Japanese MNEs is revealed in the paradox between their high-performance operational efficiency, as reflected in quality control and inventory management, on the one hand, and their low-performance profitability, on the other. The key to unraveling this paradox lies in the organizational features of those Japanese corporations that emphasize the accumulation and utilization of managerial resources to increase operational efficiency. The paradox and the type of business management are characteristics that Japanese corporations at home and abroad share. Moreover, features that have come to be considered characteristic of Japanese MNEs, such as the high ratio of Japanese expatriates, a home country-oriented style of management, and the importance of informal information networks, have a common root with the paradox. These features can be explained by the endeavors of Japanese MNEs to compensate for the insufficient transfer of their organizational characteristics which are preconditions for high operational efficiency.

Entry Mode Choice of the Japanese MNEs in Europe: Impact of Firm and Industrial Factors

In order to compete successfully in a foreign market, a firm must possess ownership advantages that can take the form of managerial and technological know-how, human skills, marketing capabilities, etc. This paper studies the impact of these advantages on foreign investor's preference for a wholly owned subsidiary versus a joint venture. The empirical results are based on a sample of 324 Japanese manufacturing companies established in Europe over the period 1994-1998. The main hypothesis is that large firms with greater experience and industrial advantages are more likely to choose a full ownership structure for its foreign affiliates. The study finds that international experience, and resource-based industries of the investing companies have a positive influence on the choice of shared ownership structure for the foreign subsidiaries. Furthermore, firm size and intangible assets measured by the R&D and advertising intensities are shown to have a non-significant relationship with entry mode.

JAPANESE SUBSIDIARIES IN AUSTRALIA: WORK PRACTICES AND SUBCONTRACTING RELATIONS AS LEARNING MECHANISM

This paper tests whether Japanese subsidiaries in Australia were learning organisations. Two strands of MNE theory are presented: dynamic capability and organisational learning models. Japanese MNEs transferred both work and subcontracting practices to their Australian subsidiaries. Statistical tests showed that there were no significant deepening in work practices or subcontracting relationships between 1993 and 1997. Our tests also revealed no long-term learning, measured by changes in work practices and subcontracting relationships for firms who had operated in Australia for more than 10 and less than 10 years. The paper advances explanations of the absence of short-term and long-term learning.

Regional Clusters, Location Tournaments and Incentives: An Empirical Analysis of Factors Attracting Japanese Investment to Singapore

This paper develops a new model for testing the role of incentives in FDI location choice by integrating the theory of the MNE with new approaches to location theory. From the theory our paper derives four testable hypotheses related to the role of policy variables in the location choice of Japanese MNEs in Singapore. Specifically we test for the existence of regional investment clusters and national tournaments as key elements in the FDI location decision. We also test for differences in the incentive preferences of export-oriented versus market-oriented investors and for first investments compared to reinvestments. Using survey data from 134 Japanese MNEs our study confirmed the existence of a Southeast Asian regional investment cluster and a location tournament between regional states. Our study also found that different incentives attracted export-oriented and market-oriented investors, but there were no significant differences in the incentive preferences of first investors compared to re-investors. The policy implications of these findings are discussed.

Explaining the geography and depth of international production: The case of US and Japanese multinational enterprises

Explaining the Geography and Depth of International Production: The Case of US and Japanese Multinational Enterprises. — This paper analyzes the determinants of intercountry variation in the extent and depth of the presence of foreign affiliates of US and Japanese MNEs, using an extended model of the location of foreign production in a four-dimensional setting. Country size, income levels, and urbanization favour the location of MNEs’ production. Geographical and cultural proximity between countries encourage investment links. However, distance favours the localization of production. Better infrastructure attracts MNEs to a country. Restrictive trade and investment regimes although costing some MNE production may improve its depth. Investment and tax incentives do affect the patterns of location of production while the strength of patent regime does not.

Japanese Joint Ventures in the UK: Does Product Classification Matter?

This paper investigates the factors that determine the choice of Japanese companies between part and full ownership of their UK subsidiaries. This choice may very well depend on the product classification of the firm. This study extends a previous paper which dealt only with aggregate manufacturing. Here the sample size has been increased and manufacturing split into consumption goods and investment goods industries. Also, the service sector has been included in the analysis. The result of the analysis suggest that the choice is governed by transaction costs considerations and that product classification does matter in the ownership strategy of Japanese MNEs in the UK.

Multinational enterprises, regional economic integration, and export-platform production in the host countries: An empirical analysis for the US and Japanese corporations

Multinational Enterprises, Regional Economic Integration and Export-Platform Production in the Host Countries: An Empirical Analysis for the US and Japanese Corporations. — This paper analyzes determinants of export orientation of overseas affiliates of US and Japanese MNEs for the 1982–1994 period. The author contends that production geared to MNEs’ home market and that production oriented to third-country markets are determined by different factors. The empirical analysis finds the home-market-oriented production concentrated in countries that offer low-cost workforce, enjoy geographical proximity or preferential access to the home market. The location of third-country-market-oriented exports is influenced more by strategic factors such as participation in regional trading blocs and preferential access to major markets than factor costs considerations.

The Motives for Joint Ventures: A Transaction Costs Analysis of Japanese MNES in the UK

What factors determine the choice of Japanese companies between part and full ownership of their UK subsidiaries? In seeking to answer this question, this study employs data of Japanese foreign direct investment (FDI), through joint ventures, in the UK, not previously used. The main findings of the econometric work presented is that transaction costs are the principal consideration when Japanese firms choose between part and full ownership of their UK subsidiaries{softhyphen}. Variables that have featured prominently in studies relating to either US parents or for subsidiaries in the US do not appear to play a significant role. The European Union (EU) market appears to be the target of Japanese foreign direct investment in the UK.

The Globalization of Business: The Challenge of the 1990s.

Journal Article The Globalization of Business: The Challenge of the 1990s. Get access The Globalization of Business: The Challenge of the iggos. By DUNNING (JOHN H.). (London and New York: Routledge, 1993. Pp. xii + 467. £47.50 hardback, £16.99 paperback. ISBN 0 415 09610 3, 0 415 09611 1.) Grazia Ietto-Gillies Grazia Ietto-Gillies South Bank University Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 104, Issue 427, 1 November 1994, Pages 1472–1474, https://doi.org/10.2307/2235471 Published: 01 November 1994