Do Keiretsu really hinder FDI into Japanese manufacturing?

Satomi Kimino, Nigel Driffield, David Saal

Research output: Contribution to journalArticle

Abstract

This paper examines an issue that has received considerable comment but little analysis. It has often been argued that the presence of the keiretsu in Japan has been instrumental in deterring multinational firms from entering Japan, though evidence for this is patchy. We present some new analysis of this issue, thereby evaluating the effects of keiretsu on inward investment penetration in Japan. In contrast to previous work in this area, our results suggest that there is little relationship between inward FDI and keiretsu networks, once one controls for endogeneity and unobservable heterogeneity. The results illustrate some important interaction effects between keiretsu and other explanatory variables that explain differences in inward investment penetration. © 2012 Copyright International Journal of the Economics of Business.
Original languageEnglish
Pages (from-to)377-395
Number of pages19
JournalInternational Journal of the Economics of Business
Volume19
Issue number3
DOIs
Publication statusPublished - Nov 2012

Bibliographical note

This is an Author's Accepted Manuscript of an article published in Kimino, S., Driffield, N., & Saal, D. (2012). Do Keiretsu really hinder FDI into Japanese manufacturing?. International journal of the economics of business, 19(3), 377-395.International journal of the economics of business 2012 2012 International Journal of the Economics of Business and Taylor & Francis, available online at: http://www.tandfonline.com/10.1080/13571516.2012.715273

Keywords

  • Keiretsu
  • market structure
  • FDI

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