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The Relationship of Industry Evolution to Patterns of Technological Linkages, Joint Ventures, and Direct Investment Between U.S. and Japan

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  • Ellen R. Auster

    (Faculty of Administrative Studies, York University, North York, Ontario, Canada M3J 1P3)

Abstract

Although economic activity between the U.S. and Japan has skyrocketed in the last decade, there are few large sample, cross-industry studies analyzing multiple forms of investment by the Japanese in the U.S. This study analyzes the key characteristics of each stage of industry evolution and the costs and benefits of each form of resource investment to predict the patterns of technological linkages, joint ventures, and direct investment of Japanese companies in the U.S. The results find support for a model predicting a predominance of technological linkages in emerging industries, joint ventures in growing industries, and direct investment in maturing industries. Technological linkages are most attractive in emerging industries as firms struggle to acquire technology, information and expertise and share cost and risk, yet retain flexibility. Joint ventures proliferate in growing industries because they offer a means of acquiring and expanding customer bases, yet reducing vulnerability. In maturing industries, where firms' key competencies are more developed, direct investment allows the company to generate demand in new markets without the disadvantage of joint governance.

Suggested Citation

  • Ellen R. Auster, 1992. "The Relationship of Industry Evolution to Patterns of Technological Linkages, Joint Ventures, and Direct Investment Between U.S. and Japan," Management Science, INFORMS, vol. 38(6), pages 778-792, June.
    • Handle: RePEc:inm:ormnsc:v:38:y:1992:i:6:p:778-792
    DOI: 10.1287/mnsc.38.6.778
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    Cited by:

    1. Chaturvedi, Tuhin & Prescott, John E., 2020. "Dynamic Fit In An Era Of Ferment: Product Design Realignment And The Survival-Enhancing Role Of Alliances And Acquisitions," Research Policy, Elsevier, vol. 49(6).
    2. Ragatz, Gary L. & Handfield, Robert B. & Petersen, Kenneth J., 2002. "Benefits associated with supplier integration into new product development under conditions of technology uncertainty," Journal of Business Research, Elsevier, vol. 55(5), pages 389-400, May.
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    5. Tony W. Tong & Yong Li, 2011. "Real Options and Investment Mode: Evidence from Corporate Venture Capital and Acquisition," Organization Science, INFORMS, vol. 22(3), pages 659-674, June.
    6. Carayannopoulos, Sofy & Auster, Ellen R., 2010. "External knowledge sourcing in biotechnology through acquisition versus alliance: A KBV approach," Research Policy, Elsevier, vol. 39(2), pages 254-267, March.
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    8. Scott A. Shane & Karl T. Ulrich, 2004. "50th Anniversary Article: Technological Innovation, Product Development, and Entrepreneurship in Management Science," Management Science, INFORMS, vol. 50(2), pages 133-144, February.
    9. repec:dgr:rugsom:00b57 is not listed on IDEAS
    10. Robert Kok & Theo Postma & A. Steerneman, 2008. "Cross-Classification Analysis Using Prediction Logic Versus Theory-Testing Logic: Comments on the Use of the DEL-Technique," Quality & Quantity: International Journal of Methodology, Springer, vol. 42(4), pages 491-511, August.
    11. Iavor Marangozov, 2005. "From Practice to Theory of the International Joint Ventures," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 44-77.
    12. repec:dau:papers:123456789/3201 is not listed on IDEAS
    13. Mehmet Ali Köseoglu & John A. Parnell & Melissa Yan Yee Yick, 2021. "Identifying influential studies and maturity level in intellectual structure of fields: evidence from strategic management," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(2), pages 1271-1309, February.
    14. Sakakibara, Mariko & Serwin, Kenneth, 2000. "U.S. Distribution Entry Strategy of Japanese Manufacturing Firms: The Role of Keiretsu," Journal of the Japanese and International Economies, Elsevier, vol. 14(1), pages 43-72, March.
    15. Kim, Myung Kyo & Narayanan, Sriram & Narasimhan, Ram, 2020. "Supply network architecture and its contingent impact on innovation performance: A field study," International Journal of Production Economics, Elsevier, vol. 224(C).
    16. Francois Collet & Déborah Philippe, 2014. "From Hot Cakes to Cold Feet: A Contingent Perspective on the Relationship between Market Uncertainty and Status Homophily in the Formation of Alliances," Journal of Management Studies, Wiley Blackwell, vol. 51(3), pages 406-432, May.
    17. Iavor Marangozov, 2005. "Characteristics of the International Joint Ventures in Bulgaria (1989-2003)," Industrial Organization 0509003, University Library of Munich, Germany.
    18. Hans T. W. Frankort & John Hagedoorn & Wilko Letterie, 2016. "Learning horizon and optimal alliance formation," Computational and Mathematical Organization Theory, Springer, vol. 22(2), pages 212-236, June.
    19. Duysters, Geert & Hagedoorn, John, 1996. "The effect of core competence building on companies performance," Research Memorandum 010, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    20. Yan, Yanni & Child, John, 2004. "Investors' resource commitments and information reporting systems: control in international joint ventures," Journal of Business Research, Elsevier, vol. 57(4), pages 361-371, April.
    21. Antonio Revilla & Zulima Fern�ndez, 2013. "Environmental Dynamism, Firm Size and the Economic Productivity of R&D," Industry and Innovation, Taylor & Francis Journals, vol. 20(6), pages 503-522, August.
    22. Kok, Robert A.W. & Postma, Theo J.B.M. & Steerneman, A.G.M., 2001. "Cross-classification analysis in the field of management and organization : comments on the DEL-technique," Research Report 00B57, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    23. Natalia Victorovna Kuznetsova, 2016. "Strategic Alliances: Industry-specifi c Characteristics of the Achievement of a Competitive Advantage," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 109-117.
    24. Zahra, Shaker A. & Bogner, William C., 2000. "Technology strategy and software new ventures' performance: Exploring the moderating effect of the competitive environment," Journal of Business Venturing, Elsevier, vol. 15(2), pages 135-173, March.

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