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Acquisition versus Greenfield Investment: The Location and Growth of Japanese Manufacturers in the United States

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  • Breandan O Huallachain
  • Neil Reid

Abstract

O HUALLACHAIN B. and REID N. (1997) Acquisition versus greenfield investment: the location and growth of Japanese manufacturers in the United States, Reg. Studies 31, 403-416. Investigating foreign direct investment by principal modes of entry helps explain the location of Japanese manufacturers in the United States. Japanese greenfield start-ups and acquired plants had distinct interregional distributions in different decades. We use ordinary least squares and tobit regression analyses to account for interstate variation in the levels of Japanese acquired and greenfield establishment in 1979, 1989 and 1992 and their expansion in the 1970s, 1980s and early 1990s. The greenfield plants propelled the formation of automobile-based industrial complexes in the Midwest and Southeast regions. Greenfield investors also avoided states with strong unions and, over time, they became unconstrained by the general distribution of American manufacturing. Although supplies of procurable assets consistently constrained acquisition flows, the Pacific Coast region was a focus of Japanese acquisition activity from the 1970s to the 1990s. During the 1980s, acquirers contributed to the development of the Japanese automobile complexes in the Midwest and Southeast. They also avoided strong unions. Those latter factors, however, were not significant locational determinants of acquisition flows in the 1990s. O HUALLACHAIN B. et REID N. (1997) La prise de participation par opposition a la creation d'entreprise sur terrain vierge: la localisation et la croissance de l'industrie japonaise aux Etats-Unis, Reg. Studies 31, 403-416. Examiner l'investissement direct etranger a partir des principales methodes d'entree contribue a une explication eventuelle de la localisation de l'industrie japonaise aux Etats-Unis. La creation d'entreprise sur terrain vierge et la prise de participation par l'industrie japonaise montrent des distributions interregionales nettes au cours des differentes decennies. A partir des analyses de regression par les moindres carres et des analyses de regression du type tobit, on explique la variation regionale de l'importance de la prise de participation et de la creation d'entreprise sur terrain vierge par l'industrie japonaise en 1979, 1989 et 1992, et leur expansion aux annees 70, aux annees 80 et au debut des annees 90. Les etablissements situes sur terrain vierge ont alimente la creation des complexes industriels bases sur l'industrie automobile dans le Midwest at dans le Sud-Est. Ceux qui investissent dans les terrains vierges evitent aussi les regions caracterisees par un taux de syndicalisation eleve, et sur le temps ils n'ont pas ete limites par la distribution generale de l'industrie americaine. Bien que la cession d'actifs disponibles a regulierement limite le flux des prises de participation, le littoral du Pacifique s'est montrele centre d'interet des prises de participation japonaises des annees 70 jusqu'aux annees 90. Au cours des annees 80, les prises de participation ont contribue au developpement des complexes japonais du secteur automobile dans le Midwest et dans le Sud-Est. En outre, on a eviteun taux de syndicalisation eleve. Toujours est-il que ces facteurs-ci n'ont pas ete d'importants determinants geographiques des flux des prises de participation aux annees 90. O HUALLACHAIN B. und REID N. (1997) Erwerb gegen Investierung im Grunen? Standort und Wachstum japanischer Hersteller in den Vereinigten Staaten, Reg. Studies 31, 403- 416. Die Untersuchung auslandischer Direktinvestierungen mittels Hauptarten der Eingange tragt dazu bei, den Standort japanischer Hersteller in den Vereinigten Staaten zu erklaren. Japanische Neugrundungen im Grunen und erworbene Betriebe weisen in verschiedenen Jahrzehnten ausgepragte interregionale Verteilungsmuster auf. Hier werden gewohnliche Mindestquadrate und tobit Regressionsanalysen zur Berechnung interstaatlicher Abweichungen im Umfang der von japanischer Seite in den Jahren 1979, 1989 und 1992 erworbenen und im Grunen begonnener Unternehmen, sowie deren Erweiterung in den siebziger, achtziger und fruhen neunziger Jahren benutzt. Die Unternehmen im Grunen trieben die Bildung von auf Benutzung von Automobilen beruhenden Industriekomplexen in den Regionen des mittleren Westen und des Sudostens voran. Im Grunen Investierende vermeiden auch Staaten mit aktiven Gewerkschaftsorganisationen, und warfen im Laufe der Zeit die Beschrankungen ab, die die allgemeine Verteilung amerikanischer herstellender Betriebe mit sich brachte. Obwohl die Versorgung mit beschaffbaren Vermogenswerten von den siebziger bis zu den neunziger Jahren Erwerbszuflusse standig beschrankte, war die Region der pazifischen Kuste in dem Zeitraum ein Brennpunkt japanischer Erwerbstatigkeit. In den achtziger Jahren trugen Kaufer zur Entwicklung des japanischen Kraftfahrzeugkomplexes im mittleren Westen und im Sudwesten bei. Auch sie wichen aktiven schaften aus. In den neunziger Jahren stellten diese letzteren Faktoren jedoch keine signifikanten standortlichen Determinanten der Erwerbsstromungen dar.

Suggested Citation

  • Breandan O Huallachain & Neil Reid, 1997. "Acquisition versus Greenfield Investment: The Location and Growth of Japanese Manufacturers in the United States," Regional Studies, Taylor & Francis Journals, vol. 31(4), pages 403-416.
  • Handle: RePEc:taf:regstd:v:31:y:1997:i:4:p:403-416
    DOI: 10.1080/00343409750133008
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    Citations

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    Cited by:

    1. Roberto, Basile, 2004. "Acquisition versus greenfield investment: the location of foreign manufacturers in Italy," Regional Science and Urban Economics, Elsevier, vol. 34(1), pages 3-25, January.
    2. Roberto Basile & Davide Castellani & Antonello Zanfei, 2009. "National boundaries and the location of multinational firms in Europe," Papers in Regional Science, Wiley Blackwell, vol. 88(4), pages 733-748, November.
    3. Nguyen, Anh, 1997. "Japanese manufacturing investment in the UK 1972-1996: an econometric analysis," MPRA Paper 1920, University Library of Munich, Germany.
    4. Bergman, Mats A. & Johansson, Per & Bergman, M.A., 2002. "Large investments in the pulp and paper industry: a count data regression analysis," Journal of Forest Economics, Elsevier, vol. 8(1), pages 29-52.
    5. Belderbos, Rene & Carree, Martin, 2002. "The Location of Japanese Investments in China: Agglomeration Effects, Keiretsu, and Firm Heterogeneity," Journal of the Japanese and International Economies, Elsevier, vol. 16(2), pages 194-211, June.
    6. Gilroy, Bernard Michael & Lukas, Elmar, 2006. "The choice between greenfield investment and cross-border acquisition: A real option approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(3), pages 447-465, July.
    7. Fung , K.C. & Korhonen, Iikka & Li, Ke & Ng, Francis, 2008. "China and central and eastern European countries : regional networks, global supply chain, or international competitors?," Policy Research Working Paper Series 4689, The World Bank.
    8. Slangen, Arjen & Hennart, Jean-François, 2007. "Greenfield or acquisition entry: A review of the empirical foreign establishment mode literature," Journal of International Management, Elsevier, vol. 13(4), pages 403-429, December.
    9. Romana Korez-Vide & Patrick Voller & Vito Bobek, 2014. "German and Austrian Foreign Direct Investment in Brazilian Regions: Which Are the Location Choice Factors?," Journal of Management and Strategy, Journal of Management and Strategy, Sciedu Press, vol. 5(4), pages 68-81, November.
    10. Ayça Tekin-Koru, 2006. "Corruption and the ownership composition of the multinational firm at the time of entry: Evidence from Turkey," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 30(2), pages 251-269, June.
    11. Tomohiko Inui & Toshiyuki Matsuura & Sandra Poncet, 2008. "The Location of Japanese MNC Affiliates: Agglomeration, Spillovers and Firm Heterogeneity," Working Papers 2008-24, CEPII research center.
    12. Nguyen, Ngoc Anh & Nguyen, Thang, 2007. "Foreign direct investment in Vietnam: An overview and analysis the determinants of spatial distribution across provinces," MPRA Paper 1921, University Library of Munich, Germany.
    13. Desislava Dikova & Keith Brouthers, 2016. "International Establishment Mode Choice: Past, Present and Future," Management International Review, Springer, vol. 56(4), pages 489-530, August.
    14. Williams, David, 2003. "Explaining employment changes in foreign manufacturing investment in the UK," International Business Review, Elsevier, vol. 12(4), pages 479-497, August.

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