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Penetration without dependence: A network analysis of Japanese economic activity in the U.S.

Auster, Ellen R.

Economic activity between the U.S. and Japan has skyrocketed in the last decade, yet there is little cross-industry research exploring entry patterns of multiple forms of investment. This study explores the form and occurrence of new Japanese investment across the U.S. economy in 1984. In the first part of the paper, a conceptual scheme for classifying investments is developed and then compared to the results generated from an empirical classification using structural equivalence analysis. The second part of the paper predicts and maps where the three key forms, direct investment (DI), high resource investment linkages (HRIL's), and low resources investment linkages (LRIL's) predominate. The results show that LRIL's are found primarily in less predictable environments with rapidly changing technologies. HRIL's are found in stable environments with difficult barriers to entry. DIs are found in more accessible, profitable environments, often providing suppliers for Japanese companies already established in the U.S. Implications for theory and policy are highlighted.

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Academic Units
Center on Japanese Economy and Business
Publisher
Center on Japanese Economy and Business, Graduate School of Business, Columbia University
Series
Center on Japanese Economy and Business Working Papers, 51
Published Here
February 8, 2011
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