Handbook of Research on Asian Entrepreneurship
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Handbook of Research on Asian Entrepreneurship

Edited by Léo-Paul Dana, Mary Han, Vanessa Ratten and Isabell M. Welpe

Asia is highly regarded as one of the fastest growing regions in the world, and this unique Handbook focuses on the internationalization process and entrepreneurial dynamics of small business within the continent. Using a clear and consistent style, the Handbook examines more than 40 countries in Asia and allows researchers to compare the environment for entrepreneurship, the internationalization of entrepreneurs and the state of small business in different Asian countries. The chapters are authored by well-known scholars who provide insight into how government policies have affected the internationalization of small firms in Asia.
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Chapter 15: Japan

Jane W. Lu and Paul W. Beamish


1 Jane W. Lu and Paul W. Beamish Introduction With the decline in trade barriers and the advancement in technology, small and medium-sized enterprises (SMEs) are playing an increasingly important role in international markets (Oviatt and McDougall, 1994, 1999). As a consequence of this surge, the internationalization of SMEs began to attract greater levels of attention in both the entrepreneurship literature and the international business literature. This increased attention led to the birth of a new academic field: international entrepreneurship, which is at the intersection of the two literatures (McDougall and Oviatt, 2000). Within this new yet fast-growing field, studies have looked at the internationalization of SMEs from a variety of countries. However, to the best of our knowledge, there is little systematic investigation on the internationalization of Japanese SMEs. Given the importance of Japan in the world economy and the dominance of SMEs in Japanese economy (Dana, 1998), such a study is much needed. In addition, most studies on the internationalization of SMEs tend to use cross-sectional data, probably due to the difficulties in locating the necessary data. As one of the first steps towards addressing these issues, this study examined 1118 foreign direct investments made by 221 Japanese SMEs during 1964–99. This longitudinal data allowed us to provide both a historical account and a detailed analysis of the internationalization process of SMEs. Specifically, we explore the characteristics and performance of Japanese SMEs’ worldwide investments. We focus on Japanese SMEs’ foreign direct investment (FDI) activities because Japan has...

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