Japanese Transnational Corporations Research Articles

Convergence or differentiation? American and Japanese transnational corporations in the Asia Pacific

As the global economic environment becomes increasingly driven by the activities of transnational corporations (TNCs) from different national origins, the question of convergence as opposed to differentiation in patterns of internationalization among TNCs has begun to intrigue a number of researchers. In this paper, we examine the extent to which the strategic functions of Japanese and American TNCs in the Asia Pacific have converged over time. We draw from a recent survey of TNCs conducted in Hong Kong and Singapore. Detailed analysis of TNC functions in both the manufacturing and non-manufacturing sectors suggests that convergence between Japanese and American TNCs has occurred most in the area of control-coordination functions among manufacturing firms, arising from a premium placed on intra-TNC organizational stability and isomorphism. On the other hand, substantial differentiation has occurred in functions that are associated with upstream and downstream processes, with Japanese TNCs emphasizing integration in marketing and manufacturing processes as well as forward integration. In contrast, American TNCs tend to focus on business and product development functions that enable them to exploit product and service differentiation.

Japanese direct foreign investment and the Asian financial crisis

This paper examines the extent to which the Asian currency crisis of 1997–1998 impacted upon the behaviour of Japanese foreign direct investment (FDI) in the manufacturing sector. Much literature has claimed that transnational corporations (TNCs) are unlikely to be firmly embedded in the host countries where they operate. If this is the case, then Japanese firms in Asia might have exhibited a high degree of disinvestment or plant closure and transfer of operations to other countries following the onset of the financial crisis. Although the events surrounding the Asian crisis and subsequent recovery are still unfolding, FDI data, surveys of Japanese firms, and initial reactions by Toyota Motor Corporation and Matsushita Electric Industrial were reviewed to examine this proposition. In general, the evidence suggests that Japanese TNCs have not fled Asia bur rather they responded in the following manner. First, flows of Japanese FDI into Asia overall held steady throughout fiscal year 1997–1998, although it was set to decline thereafter, at least for the short term. Second, at the level of individual corporations, there is some evidence to show that major firms have maintained their operations, and that they have shifted to an export-orientation so as to earn income from their Asian production in overseas currencies. Third, the survey evidence points to a long-term commitment to Asia by Japanese transnationals.

Japanese transnational corporations' knowledge transfer to Southeast Asia: the case of the electrical and electronics sector in Malaysia

The role of Japanese Transnational Corporations (TNCs) in the economic development of the host Southeast Asian countries is at the heart of contemporary discussion on knowledge transfer. This paper is an empirical analysis of the existence of knowledge transfer from Japanese TNCs to their local suppliers in the Malaysian Electrical and Electronics sector. A logistic regression model enables to define the factors that determine the existence of knowledge transfer between Japanese affiliates and their local suppliers.

International Competition, Inward Investment and the Restructuring of European Work and Industrial Relations

This article addresses the interplay between international competition and national institutional patterns. It discusses the involvement of Japanese transnational corporations (TNCs) in the contemporary restructuring of work organization and industrial relations in three European countries with historically disparate `systems', Britain, Germany and France. There are three main arguments. First, the operations and influence of such firms have been significantly mediated by existing national institutional configurations; second, such institutional complexes are marked not only by external pressures but also by internal tensions and contestation; and third, while Japanese TNCs have made a direct or indirect contribution to important shifts in work and employment relations, these have not produced a simple convergence towards a new production paradigm.

Factors motivating transfer pricing choices of Japanese and United States transnational corporations

Contrary to prior findings, Japanese transnational corporations (TNCs) seem to have changed their preferences for international transfer pricing methods from cost-based to market-based and negotiated methods. Use of negotiated methods is supported by the Japanese preference for collectivism and consensus. The significant risk of an audit of U.S. TNCs by both the U.S. Internal Revenue Service and the Japanese National Tax Administration is at odds with both tax authorities' official policies, which theoretically accord cost-based methods equal standing with market methods. In practice, however, cost-based methods trigger IRS audits more than twice as often as other methods, suggesting that the IRS acceptance o f the “best method” in reality is acceptance of market methods and negotiated methods based on market prices. Japanese TNCs consider segment profit to be more important than all other measures when evaluating managers, regardless of station. When choosing a pricing method, performance evaluation concerns are significantly more important to Japanese TNCs than to U.S. TNCs. U.S. TNCs employ various practices to counter the internal distorting effects of transfer pricing practices but use pricing transfer methods that provide distorted results and increase audit risk. Finally, it appears that effective, rather than statutory tax rates, might guide TNC behavior on income shifting. Increased disclosure seems necessary to deter these and other transfer pricing manipulations.

Hiring and Localization Policies of Transnational Corporations in Thailand

This article assesses the effectiveness of policies adopted by transnational corporations (TNCs) concerning the hiring of local staff and localization of top management positions in Thailand. A boom in direct foreign investment in Thailand since the mid-1980s has created a strong demand for engineering and technical staff. In view of the shortage of local supply, skill formation and training programs for local employees at all levels are emphasized. Differences in policy among Japanese, American and European TNCs are noted, with localization noticeably less likely among Japanese TNCs.

Japanese Business Down Under: Patterns of Japanese Investment in Australia.

Part I: Australia's Role in the Internationalistion of the Japanese Economy 1. Japanese Transnational Corporations: Motivations and Overseas Strategies 2. Japan, Australia and the Pacific Rim Part II: Japanese Business Activity in Australia, 1957-1985 3. Trading Companies 4. Manufacturing Companies 5. Banks and Financial Institutions Part III: Patterns and Implications 6. Patterns of Japanese Business Activity in Australia 7. Conclusions.

Japanese Transnational Corporations in Malaysia's State Sponsored Heavy Industrialization Drive: The HICOM Automobile and Steel Projects

N BECOMING PRIME MINISTER OF MALAYSIA IN 1981, Datuk Seri Dr. Mahathir bin Mohamad launched a large-scale, state-sponsored heavy industrialization drive. This effort was to rely heavily on Japanese capital, technology, and finance. Joint ventures were to be established between the recently formed, 100-percent-government-owned Heavy Industries Corporation of Malaysia (HICOM) and selected Japanese transnational corporations. This multiventure drive was initially to center on motor vehicle and steel projects. HICOM negotiated joint ventures for auto manufacture, Perusahaan Otomobil Nasional (PROTON), with Mitsubishi Motor Corporation (MMC) and Mitsubishi Corporation (MC), and for a steel complex, Perwaja Trengganu Sdn. Bhd. (Perwaja) with a consortium of eightJapanese firms led by Nippon Steel Corporation (NSC). While national leaders had long attempted to promote manufacturing, Mahathir's strategy represented a new departure in industrial policy. These projects were part of his larger effort to restructure Malaysia's political economy' and to increase the

Some Urban and Regional Consequences of Japanese Transnational Activity in Australia

In this paper, I address the spatial patterns of Japanese transnational corporations (TNCs) in Australia over the last two decades. It is argued that—in the context of growing economic linkages between Australia, Japan, and the Western Pacific—an understanding of TNC behaviour is essential to make sense of the subnational spatial outcomes arising from economic integration between countries. Accordingly, after discussing the history and characteristics of Japanese TNCs in Australia, I consider the spatial distribution of three elements of Japanese TNC activity—mining, manufacturing, and corporate head offices. The analysis suggests that the stronger economic linkages with Japan have indeed been associated with distinctive urban and regional change within Australia and that this is also reflected in the spatial patterns of individual Japanese TNCs. I conclude that a combination of Japanese corporate characteristics, together with the peculiarities of the Australian space economy, has led to a hierarchy of spatial impacts. This in turn emphasises a more general link between economic integration, TNC world strategies, and regional change in host countries.