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The determinants of geographic configuration of value chain activities: Foreign multinational enterprises in Japanese manufacturing


  • Hideki Yamawaki



This paper attempts to identify the determinants of the multinational enterprise’s decision to locate value chain activities, such as R&D, procurement, production, and distribution, among the source and the host countries. Using data of foreign firms in Japanese manufacturing, the statistical analysis found that the determinants of direct investment in one business activity are not necessarily the same as the determinants for another activity, while they are linked each other through complex mechanisms. For example, foreign subsidiaries in R&D intensive industries in Japan are more likely to import intermediate goods, use contractors for production, and distribute through fragmented distribution system. It appears that the traditional transaction-cost model is less consistent with the pattern of investments in R&D, productions, and distribution at least for the sample used in this paper. Copyright Springer-Verlag Berlin Heidelberg 2004

Suggested Citation

  • Hideki Yamawaki, 2004. "The determinants of geographic configuration of value chain activities: Foreign multinational enterprises in Japanese manufacturing," International Economics and Economic Policy, Springer, vol. 1(2), pages 195-213, January.
  • Handle: RePEc:kap:iecepo:v:1:y:2004:i:2:p:195-213 DOI: 10.1007/s10368-004-0014-9

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    References listed on IDEAS

    1. Miwa, Yoshiro & Ramseyer, J. Mark, 2006. "The Fable of the Keiretsu," University of Chicago Press Economics Books, University of Chicago Press, edition 0, number 9780226532707, February.
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    3. Takeo Hoshi & Anil Kashyap & David Scharfstein, 1991. "Corporate Structure, Liquidity, and Investment: Evidence from Japanese Industrial Groups," The Quarterly Journal of Economics, Oxford University Press, vol. 106(1), pages 33-60.
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    8. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," Review of Economic Studies, Oxford University Press, vol. 51(3), pages 393-414.
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    Cited by:

    1. Schmid, Stefan & Grosche, Philipp & Mayrhofer, Ulrike, 2016. "Configuration and coordination of international marketing activities," International Business Review, Elsevier, vol. 25(2), pages 535-547.
    2. Canfei He & Xiaojun Xiao, 2011. "Geography of Multinational Corporations and Functional Specialization in Chinese Cities," Symphonya. Emerging Issues in Management, University of Milano-Bicocca, issue 1 Global .
    3. Hideki Yamawaki, 2004. "Who Survives in Japan? An Empirical Analysis of European and U.S. Multinational Firms in Japanese Manufacturing Industries," Journal of Industry, Competition and Trade, Springer, vol. 4(2), pages 135-153, June.

    More about this item


    vertical foreign direct investment; R&D; manufacturing; distribution; F21; F23; L22;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure


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