Japanese Investment in the World Economy
Show Less

Japanese Investment in the World Economy

A Study of Strategic Themes in the Internationalisation of Japanese Industry

  • New Horizons in International Business series

Roger Farrell

This book examines Japanese Foreign Direct Investment (FDI) in the world economy over more than five decades. It provides a unique focus on the internationalisation experience of selected industries, such as forestry, textiles, electronics, motor vehicles, steel and services as well as case studies of individual firms. Japanese Investment in the World Economy is distinctive in that it examines overseas investment by firms in the primary, manufacturing and services sectors over the period in which the Japanese economy became the second largest in the world.
Buy Book in Print
Show Summary Details

Chapter 4: Organisation and Structure

Roger Farrell

Extract

4. Organisation and structure OVERVIEW The organisational structure of Japanese subsidiaries has a predominate focus on an international marketing, sales and distribution network to facilitate exports and imports. There is also a strong bias towards intrafirm trade, investment and technology flows in the corporate boundary between parents and overseas subsidiaries and affiliates. In theory, a firm is likely to invest in the creation of foreign affiliates if the ‘transaction costs’ of finding and monitoring the performance of a foreign partner or agent are too high – or the firm fears the loss of proprietary technology through licensing. If these costs are low, the firm may prefer to export from the home country (Hennart and Park, 1993). In the case of Japanese FDI, there has also been a management and cultural preference to maintain ownership and control by the parent company, based on expatriate management of affiliates. In the international business operations of Japanese firms there is often a close relationship between the overseas affiliates of parents which have ties in Japan – which has led to sales and procurement being tied to customary linkages and traditional suppliers and customers. In the manufacturing sector, this organisational pattern has led to the domestic supply chains between automotive assemblers and parts and component producers being replicated in other economies, such as in the United States, Europe and East Asia. Typically, the international subsidiaries of Japanese services firms, such as business services, communications and transport services, construction, real estate and financial...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.


Further information

or login to access all content.