Fdi in Electronics in Japan Essay

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Since the mid-1980s, Japanese multinational corporations (MNCs) have grown in importance around the world, challenging if not replacing the once hegemonic models of foreign investment and overseas business offered byUS-based corporations (Campbell and Burton, 1994; Hollerman andMyers, 1996;Morris, 1991). In the case of Asia-Pacific,
JapaneseMNCs have participated extensively in the region's evolution, creating chains of production connecting Japan with the Asian NIEs (newly industrializing economies),
ASEAN countries (those belonging to the Association of Southeast Asian Nations),
China, and other countries such as Vietnam (Borrus, 1993; 1997; Ernst, 1994; 1997).
Indeed, Japanese MNCs have invested in the region to a greater degree than haveMNCs based in North America and Europe, and have bound together a Japanese-centred division of labour that provides the Asian basis for the global triad of dominant economic regions (Fukui, 1994; Kwan, 1994).
A burgeoning literature exists on Japanese business in Asia-Pacific (for example,
Chen and Drysdale, 1995; Dobson, 1993; Dobson and Yue, 1997; Doherty, 1994; Itagaki,
1997; Sing, 1995). It shows that Japanese networks rest upon technological leadership and functional connections among a wide range of affiliated assembly factories and parts suppliers, together with regional management centres and R&D centres. By comparison, Chinese networks in Asia-Pacific have concentrated on trade or finance
(with few exceptions), while offshore investments from the Asian NIEs remain largely in labour-intensive manufacturing, particularly textiles and footwear (Hamilton, 1991;
Tachiki, 1993; Yeung, 1994). This literature has also typically accepted the so-called
`flying geese' model, an analogy which implies a distinct spatial division of labour within Japanese MNCs in which the economic interests of Japan and Asia are often
Foreign direct investment and the flying geese model:
Japanese electronics firms in Asia-Pacific
David W Edgington
Department of Geography, University of British Columbia, Vancouver, BC V6T 1Z2, Canada; e-mail: edgingtn@geog.ubc.ca
Roger Hayter
Department of Geography, Simon Fraser University, Burnaby, BC V5A 1S6, Canada; e-mail: hayter@sfu.ca
Received 13 October 1998; in revised form 21 April 1999
Environment and Planning A 2000, volume 32, pages 281 ^ 304
Abstract. This paper is a critical examination of the `flying geese' and `billiard ball' models of foreign direct investment (FDI) and their ability to explain the spatial expansion of Japanese electronics multinationals (MNCs) in Asia-Pacific countries from 1985 to 1996. Data on Japanese FDI are analyzed in this region at the aggregate, sectoral, and firm level. The paper commences with a review of the flying geese model, especially that version which interprets Japanese FDI as a catalyst for Asian development, and the billiard ball metaphor which suggests a mechanism for host countries to `catch up' with Japan. The authors then turn to an analysis of Japanese FDI in Asia-Pacific together with employment data for fourteen major firms. This allows an evaluation of the two models in terms of recent geographical patterns of investment and employment growth by electronics MNCs. A special case study of Matsushita Electric Industrial Co. Ltd (MEI) helps flesh out the evolving geography of
Japanese electronics firms in Asia-Pacific. Although the results support the overall patterns suggested by the two models, the authors argue that metaphors and analogies such as flying geese and billiard balls should not be used casually and as a substitute for analysis.
seen in mutually beneficial terms (for example, Fukushima and Kwan, 1995; Shinohara,
1982; Takayasu and Ishizaki, 1995); although, as we will show later, the model has not been uncontested (see Bernard and Ravenhill, 1995; Hart-Landsberg and Burkett, 1998;
Hatch and Yamamura, 1996; Steven, 1996).
In this…