OWNERSHIP STRATEGY OF JAPANESE TRADING COMPANIES AND INTERNALIZATION OF MNCS

Abstract

This study investigated how the ownership strategies of Japanese General Trading Companies affect the internationalization of Japanese manufacturing MNCs through the survival of their joint ventures (JVs) in foreign countries. We extended the Resource-based View (RBV) theory to explain a phenomenon to which it has not previously been applied ? the crucial roles of them in helping Japanese MNCs? foreign entries. We also explored the complementarities of Japanese Trading Firms and local firms. Using the data set of 8,549 foreign subsidiaries of Japanese firms, we tested four hypotheses with the binary logistic regression model and the Cox proportional hazard model. Findings show that they have played important roles in helping Japanese MNCs enter and start their businesses in foreign countries through the foundation of JVs with Japanese MNCs (i.e. the parent firms) and/or with Japanese MNCs and local firms in these host countries.