A Study of Strategic Themes in the Internationalisation of Japanese Industry
New Horizons in International Business series
Chapter 23: Construction Services
INTRODUCTION Construction is a signiﬁcant industry in Japan and accounted for almost one ﬁfth of national output at its peak in 1990, when it employed more than six million people or around ten per cent of the work force. While the industry is oriented towards the domestic market, larger construction ﬁrms have operated around the world, particularly in North America and East Asia, although there was a withdrawal from the international construction services market in the 1990s. In the post-war period, Japanese construction ﬁrms became actively involved in foreign construction projects around the world, ranging from infrastructure such as bridges, roads and hospitals for Oﬃcial Development Assistance (ODA) projects and the construction of industrial estates and oﬃce and hotel facilities for other Japanese ﬁrms across the world. Beginning in the 1950s, ﬁrms in the construction industry were awarded overseas contracts with ODA funding, to build infrastructure in Korea and Taiwan. Overseas construction of infrastructure in East Asia often complemented foreign investment inﬂows from Japanese manufacturing ﬁrms in the textiles and other light industries. Yen loans under the ODA scheme were used to build ports, roads, rail and industrial estates – almost always with Japanese contractors or joint ventures with a Japanese partner. Larger Japanese ﬁrms such as Kajima, Obayashi and Nishimatsu were involved in the construction of ports, roads and industrial estates, including the Kaoshiung Export Processing Zone in Taiwan and the Masan Free Export Processing Zone in South Korea, both of which attracted investment from light...
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