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Do Japanese MNCs use expatriates to contain risk in Asian host countries?

Author

Listed:
  • Jean-Pascal Bassino

    (ENS de Lyon - École normale supérieure de Lyon - Université de Lyon)

  • Marion Dovis

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • 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 industries in 13 host countries in Asia. We find that country risk is negatively correlated with the degree of expatriation and that, rather than host-country risk, firm-specific factors (particularly capital intensity, 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 with the degree of expatriation. Japanese multinational companies do not rely on expatria127=tes 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?," Post-Print hal-01456121, HAL.
    • Handle: RePEc:hal:journl:hal-01456121
    DOI: 10.1080/13602381.2015.1022426
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    Cited by:

    1. Farah, Bassam & Chakravarty, Dwarka & Dau, Luis & Beamish, Paul W., 2022. "Multinational enterprise parent-subsidiary governance and survival," Journal of World Business, Elsevier, vol. 57(2).
    2. Iwashita, Hitoshi, 2022. "Language and identity in the shadow: A multi-case study of a Japanese multinational corporation," International Business Review, Elsevier, vol. 31(2).
    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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    Keywords

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    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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