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Size and growth of Japanese plants in the United States

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  • Blonigen, Bruce A.
  • Tomlin, KaSaundra

Abstract

Using a unique database on all Japanese manufacturing plants in the United States, we examine the relationship between plant size and growth for these foreign-owned plants. These plants average sizes are three times larger than comparable U.S. plants and experienced 30 percent growth from 1987 through 1990, while U.S. average plant sizes declined over the same period. Our estimates strongly reject Gibrat's Law for these plants, and suggest that smaller plants grow faster. We also find learning affects plant-level growth. Newer plants grow quicker and previous investments by the parent firm mean slower growth, particularly for automobile-related plants. Both are consistent with inexperienced firms growing faster as they learn.
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  • Blonigen, Bruce A. & Tomlin, KaSaundra, 2001. "Size and growth of Japanese plants in the United States," International Journal of Industrial Organization, Elsevier, vol. 19(6), pages 931-952, May.
  • Handle: RePEc:eee:indorg:v:19:y:2001:i:6:p:931-952
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    Cited by:

    1. Harald Oberhofer & Michael Pfaffermayr, 2013. "Firm growth in multinational corporate groups," Empirical Economics, Springer, vol. 44(3), pages 1435-1453, June.
    2. Blandina Oliveira & Adelino Fortunato, 2008. "The dynamics of the growth of firms: evidence from the services sector," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 35(3), pages 293-312, July.
    3. Harald Oberhofer, 2012. "Firm Growth, European Industry Dynamics and Domestic Business Cycles," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(3), pages 316-337, July.
    4. Christian Bellak, 2001. "Multinational Enterprises and Their Domestic Counterparts: Past Research, Current Issues and Future Directions," Working Papers geewp18, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    5. Jan Bentzen & Erik Madsen & Valdemar Smith, 2012. "Do firms’ growth rates depend on firm size?," Small Business Economics, Springer, vol. 39(4), pages 937-947, November.
    6. Bernard, Andrew B. & Jensen, J. Bradford & Schott, Peter K., 2006. "Survival of the best fit: Exposure to low-wage countries and the (uneven) growth of U.S. manufacturing plants," Journal of International Economics, Elsevier, vol. 68(1), pages 219-237, January.
    7. Pfaffermayr, Michael & Bellak, Christian, 2000. "Why foreign-owned firms are different : a conceptual framework and empirical evidence for Austria," HWWA Discussion Papers 115, Hamburg Institute of International Economics (HWWA).
    8. Bentzen, Jan & Madsen, Erik Strøjer & Smith, Valdemar, 2006. "The Growth Opportunities for SMEs?," Working Papers 06-3, University of Aarhus, Aarhus School of Business, Department of Economics.
    9. Ding, Ding, 2015. "Leaning from multinational companies through hiring: An empirical investigation," Working Paper Series in Economics and Institutions of Innovation 402, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    10. Andrew B. Bernard & J. Bradford Jensen & Peter K. Schott, 2002. "Survival of the Best Fit: Competition from Low Wage Countries and the (Uneven) Growth of US Manufacturing Plants," NBER Working Papers 9170, National Bureau of Economic Research, Inc.
    11. Kandogan, Yener, 2012. "Regional foreign direct investment potential of the states within the US," Journal of Economics and Business, Elsevier, vol. 64(4), pages 306-322.
    12. Boubacar, Inoussa, 2016. "Spatial determinants of U.S. FDI and exports in OECD countries," Economic Systems, Elsevier, vol. 40(1), pages 135-144.
    13. Blonigen, Bruce A., 2001. "In search of substitution between foreign production and exports," Journal of International Economics, Elsevier, vol. 53(1), pages 81-104, February.
    14. Dirk Burghardt & Marco Helm, 2015. "Firm growth in the course of mergers and acquisitions," Small Business Economics, Springer, vol. 44(4), pages 889-904, April.
    15. Yuan, Lin & Pangarkar, Nitin & Wu, Jie, 2016. "The interactive effect of time and host country location on Chinese MNCs’ performance: An empirical investigation," Journal of World Business, Elsevier, vol. 51(2), pages 331-342.
    16. Sule Ozler & Erol Taymaz, 2004. "Does foreign ownership matter for survival and growth? Dynamics of competition and foreign direct investment," ERC Working Papers 0406, ERC - Economic Research Center, Middle East Technical University, revised Mar 2004.
    17. Ushijima, Tatsuo, 2008. "Domestic bank health and foreign direct investment," Journal of the Japanese and International Economies, Elsevier, vol. 22(3), pages 291-309, September.
    18. Lucia Piscitello & Larissa Rabbiosi, 2005. "The impact of inward FDI on local companies' labour productivity: evidence from the Italian case," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 12(1), pages 35-51.
    19. Ushijima, Tatsuo, 2005. "Internal capital market and the growth and survival of Japanese plants in the United States," Journal of the Japanese and International Economies, Elsevier, vol. 19(3), pages 366-385, September.
    20. Hennessy, David A. & Lapan, Harvey E., 2005. "Statistical Moments Analysis of Production and Profits in Multi-Product Cournot Oligopoly," Staff General Research Papers Archive 12471, Iowa State University, Department of Economics.

    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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