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Who Survives in Japan? An Empirical Analysis of European and U.S. Multinational Firms in Japanese Manufacturing Industries

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  • Hideki Yamawaki

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Abstract

This paper provides new evidence on exit patterns of European and U.S. firms in Japanese manufacturing industries. Specifically, the paper tests two sets of hypotheses: (1) Japan's distinctive business institutions and practices work against foreign firms and constitute a barrier to operate in Japan; and (2) the international configuration of business activities of foreign firms determines their post-entry performance in Japan. Using a new sample of 366 subsidiaries established during the 1973--1994 period in Japan, the paper finds, most importantly, that the exit pattern of foreign firms in Japan is influenced significantly by the industry-specific factors that determine infant mortalities and the subsidiary-specific factors that determine the subsidiary's international activities. On the contrary, this paper finds that Japan's distinctive business practices are less likely to affect the exit pattern.

Suggested Citation

  • 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.
  • Handle: RePEc:kap:jincot:v:4:y:2004:i:2:p:135-153
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    References listed on IDEAS

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    1. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, January.
    2. Gary R. Saxonhouse, 1993. "What Does Japanese Trade Structure Tell Us about Japanese Trade Policy?," Journal of Economic Perspectives, American Economic Association, vol. 7(3), pages 21-43, Summer.
    3. 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.
    4. Paprzycki,Ralph & Fukao,Kyoji, 2012. "Foreign Direct Investment in Japan," Cambridge Books, Cambridge University Press, number 9781107411289, March.
    5. repec:fth:michin:337 is not listed on IDEAS
    6. Encarnation, Dennis J. & Mason, Mark, 1990. "Neither MITI nor America: the political economy of capital liberalization in Japan," International Organization, Cambridge University Press, vol. 44(01), pages 25-54, December.
    7. Baldwin,John R. & Gorecki,Paul, 1998. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521633574, March.
    8. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, January.
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    Cited by:

    1. Sargent, John & Matthews, Linda, 2009. "China versus Mexico in the Global EPZ Industry: Maquiladoras, FDI Quality, and Plant Mortality," World Development, Elsevier, vol. 37(6), pages 1069-1082, June.

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