Who Survives in Japan? An Empirical Analysis of European and U.S. Multinational Firms in Japanese Manufacturing Industries

Author: Hideki Yamawaki

Source: Journal of Industry, Competition and Trade, Volume 4, Number 2, June 2004 , pp. 135-153(19)

Publisher: Springer

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Abstract:

This paper provides new evidence on exit patterns of European and U.S. firms in Japanese manufacturing industries. Specifically, the paper tests two sets of hypotheses: (1) Japan’s distinctive business institutions and practices work against foreign firms and constitute a barrier to operate in Japan; and (2) the international configuration of business activities of foreign firms determines their post-entry performance in Japan. Using a new sample of 366 subsidiaries established during the 1973–1994 period in Japan, the paper finds, most importantly, that the exit pattern of foreign firms in Japan is influenced significantly by the industry-specific factors that determine infant mortalities and the subsidiary-specific factors that determine the subsidiary’s international activities. On the contrary, this paper finds that Japan’s distinctive business practices are less likely to affect the exit pattern.

Keywords: multinational enterprise; entry; exit; Japan

Document Type: Research article

DOI: http://dx.doi.org/10.1023/B:JICT.0000037358.43442.78

Affiliations: 1: Peter F. Drucker and Masatoshi Ito Graduate School of Management, Claremont Graduate University, 1021 North Dartmouth Avenue, Claremont, CA 91711, U.S.A. hideki.yamawaki@cgu.edu, Email: hideki.yamawaki@cgu.edu

Publication date: 2004-06-01