The regional nature of Japanese multinational business
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In the world's largest 500 firms, there are 64 Japanese multinational enterprises (MNEs) with data on regional sales, but only three operate globally; whereas 57 of them average over 80% of their sales and foreign assets in their home region. Why is there such a strong intra-regional dimension to their activities? Using empirical data and a new framework for analysing both downstream (sales) assets and upstream (production) assets we analyse why most large Japanese firms appear to have firm-specific advantages (FSAs) that are based in their home region. A structural contingency approach is applied to two case studies to explain how home-region-bound FSAs constrained the ability of Japanese MNEs to implement internationalisation strategies.
KeywordsJapan multinational enterprises firm-specific advantage regional strategy structural contingency approach internationalisation
A previous version of this paper has been improved by helpful comments from Eleanor Westney and Tom Roehl. We have also been helped by comments and guidance from the Editor-in-Chief, Arie Y. Lewin, and several reviewers. Helpful comments were also made by participants at seminars at the University of Sydney, AGSM, Nanyang Technological University, AJBS and AIB at Quebec City, and the AOM in Hawaii. The authors would like to acknowledge support from the Advanced Institute of Management (AIM) and funding from the UK Economic and Social Research Council (ESRC).
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