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Foreign‐owned versus Domestically‐owned Firms: Economic Performance in Japan

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  • Fukunari Kimura
  • Kozo Kiyota

Abstract

This paper utilizes micro‐panel data for firms located in Japan and examines differences in corporate performance between foreign‐owned and domestically‐owned firms in the 1990s. We find that foreign‐owned firms not only reflect superior static characteristics, but also achieve faster growth. Moreover, foreign investors appear to invest in firms that may not be immediately profitable, but those that are potentially the most profitable in the future. There is also no evidence that foreign investor is “foot‐loose.” These imply that foreign investors bring useful firm‐specific assets into the Japanese market, which may work as an effective catalyst for necessary structural reform.

Suggested Citation

  • Fukunari Kimura & Kozo Kiyota, 2007. "Foreign‐owned versus Domestically‐owned Firms: Economic Performance in Japan," Review of Development Economics, Wiley Blackwell, vol. 11(1), pages 31-48, February.
    • Handle: RePEc:bla:rdevec:v:11:y:2007:i:1:p:31-48
    DOI: 10.1111/j.1467-9361.2006.00347.x
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    References listed on IDEAS

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    1. Blomstrom, Magnus & Gangnes, Byron & La Croix, Sumner (ed.), 2001. "Japan's New Economy: Continuity and Change in the Twenty-First Century," OUP Catalogue, Oxford University Press, number 9780199241736.
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    3. Howard Lewis III & J. David Richardson, 2001. "Why Global Commitment Really Matters!," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 329, April.
    4. Mary Hallward-Driemeier & Giuseppe Iarossi & Kenneth L. Sokoloff, 2002. "Exports and Manufacturing Productivity in East Asia: A Comparative Analysis with Firm-Level Data," NBER Working Papers 8894, National Bureau of Economic Research, Inc.
    5. Paprzycki,Ralph & Fukao,Kyoji, 2012. "Foreign Direct Investment in Japan," Cambridge Books, Cambridge University Press, number 9781107411289, January.
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