Do Keiretsu really hinder FDI into Japanese manufacturing?


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.

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Divisions: Aston Business School
Aston Business School > Economics, Finance & Entrepreneurship
Aston Business School > Aston India Foundation for Applied Research
Additional Information: 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:
Uncontrolled Keywords: Keiretsu,market structure,FDI,Economics and Econometrics,Business, Management and Accounting (miscellaneous)
Full Text Link: http://www.tand ... 516.2012.715273
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2012-11
Authors: Kimino, Satomi
Driffield, Nigel ( 0000-0003-1056-3117)
Saal, David



Version: Accepted Version

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