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Do Japanese MNCs use Expatriates to Contain Risk in Asian Host Countries?

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  • Jean-Pascal Bassino
  • Marion Dovis
  • Pierre van der Eng

Abstract

We investigate the impact of host country risk on the expatriation strategies of multinational firms, using data on Japanese subsidiary firms in manufacturing industry in 13 host countries in Asia. We find that country risk is negatively correlated wiht the degree of expatriation and that, rather than hostry country risk, firm-specific factors (particularly capital intesity, ownership share of parent firms in subsidiaries and the age of the venture) explain most of the variation in the degree to which subsidiaries rely on Japanese expatriates. Contrary to previous studies, the capital intensity of production is a key explanatory firm-specific variable that correlates positively wiht the degree of expatriation. Japanese MNCs do no rely on expatriates to off-set host country risk, but to mitigate risk to parent investment in subsidiaries

Suggested Citation

  • Jean-Pascal Bassino & Marion Dovis & Pierre van der Eng, 2015. "Do Japanese MNCs use Expatriates to Contain Risk in Asian Host Countries?," AJRC Working Papers 1502, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
  • Handle: RePEc:csg:ajrcwp:1502
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    File URL: https://crawford.anu.edu.au/pdf/ajrc/wpapers/2015/201502.pdf
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    References listed on IDEAS

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    1. Timothy Dean Keeley, 2001. "International Human Resource Management in Japanese Firms," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-59765-5, September.
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    Cited by:

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    3. Eduardsen, Jonas & Marinova, Svetla, 2020. "Internationalisation and risk: Literature review, integrative framework and research agenda," International Business Review, Elsevier, vol. 29(3).

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    More about this item

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • N85 - Economic History - - Micro-Business History - - - Asia including Middle East

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