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The characteristics and performance of Japanese FDI in less developed and developed countries

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  • Makino, Shige
  • Beamish, Paul W.
  • Zhao, Natalie Bin

Abstract

Data on 26,857 Japanese foreign investments in 150 countries and regions over the 1991-1999 period reveal that there are stark differences in the characteristics and performance of Japanese FDI (JFDI) between less developed countries (LDCs) and developed countries (DCs). JFDI in LDCs has been growing more rapidly over the period, and it is concentrated in the Secondary industrial sector, with a lower level of control within a subsidiary, and has been initiated by parent firms with market-seeking and labor-seeking purposes and with relatively weak ownership advantages. In contrast, JFDI in DCs has maintained relatively stable growth over the period, is concentrated in the Tertiary industrial sector, with a higher level of control within a subsidiary, and has been initiated by parent firms with market-seeking and strategic-seeking purposes and with relatively strong ownership advantages. JFDI in LDCs tended to attain a higher financial performance and a lower exit rate, yet with a greater variance, than those in DCs.

Suggested Citation

  • Makino, Shige & Beamish, Paul W. & Zhao, Natalie Bin, 2004. "The characteristics and performance of Japanese FDI in less developed and developed countries," Journal of World Business, Elsevier, vol. 39(4), pages 377-392, November.
  • Handle: RePEc:eee:worbus:v:39:y:2004:i:4:p:377-392
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    Cited by:

    1. Lien, Yung-Chih & Filatotchev, Igor, 2015. "Ownership characteristics as determinants of FDI location decisions in emerging economies," Journal of World Business, Elsevier, vol. 50(4), pages 637-650.
    2. Demirbag, Mehmet & Apaydin, Marina & Tatoglu, Ekrem, 2011. "Survival of Japanese subsidiaries in the Middle East and North Africa," Journal of World Business, Elsevier, vol. 46(4), pages 411-425, October.
    3. Chakravarty, Dwarka & Hsieh, Ying-Ying & Schotter, Andreas P.J. & Beamish, Paul W., 2017. "Multinational enterprise regional management centres: Characteristics and performance," Journal of World Business, Elsevier, vol. 52(2), pages 296-311.
    4. Demirbag, Mehmet & Tatoglu, Ekrem & Glaister, Keith W., 2009. "Equity-based entry modes of emerging country multinationals: Lessons from Turkey," Journal of World Business, Elsevier, vol. 44(4), pages 445-462, October.
    5. repec:spr:manint:v:57:y:2017:i:3:d:10.1007_s11575-016-0287-6 is not listed on IDEAS
    6. Huan Zou & Xiaohui Liu & Pervez Ghauri, 2010. "Technology Capability And The Internationalization Strategies Of New Ventures," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 1(1).
    7. Beamish, Paul W. & Lupton, Nathaniel C., 2016. "Cooperative strategies in international business and management: Reflections on the past 50 years and future directions," Journal of World Business, Elsevier, vol. 51(1), pages 163-175.
    8. Pao-Li Chang & Chia-Hui Lu, 2010. "Risk, Learning, and the Technology Content of FDI: A Dynamic Model," Working Papers 30-2010, Singapore Management University, School of Economics.
    9. Goldszmidt, Rafael G. Burstein & Brito, Luiz Artur Ledur & de Vasconcelos, Flávio Carvalho, 2011. "Country effect on firm performance: A multilevel approach," Journal of Business Research, Elsevier, vol. 64(3), pages 273-279, March.
    10. Chang, Pao-Li & Lu, Chia-Hui, 2012. "Risk and the technology content of FDI: A dynamic model," Journal of International Economics, Elsevier, vol. 86(2), pages 306-317.
    11. Jiang, Guoliang F. & Holburn, Guy L.F. & Beamish, Paul W., 2016. "The spatial structure of foreign subsidiaries and MNE expansion strategy," Journal of World Business, Elsevier, vol. 51(3), pages 438-450.
    12. George Peng & Paul Beamish, 2008. "The Effect of National Corporate Responsibility Environment on Japanese Foreign Direct Investment," Journal of Business Ethics, Springer, vol. 80(4), pages 677-695, July.
    13. Piotr Trapczynski, 2013. "Determinants Of Foreign Direct Investment Performance – A Critical Literature Review," Oeconomia Copernicana, Institute of Economic Research, vol. 4(2), pages 117-132, June.

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