Sequential Investment, Firm Motives, and Agglomeration of Japanese Electronics Firms in the United States

22 Pages Posted: 7 Sep 2004

See all articles by Wilbur Chung

Wilbur Chung

University of Maryland - Robert H. Smith School of Business

Jaeyong Song

Yonsei University, Seoul Campus, College of Business and Economics

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Abstract

Recent research finds that firms investing abroad tend to agglomerate with other foreign entrants. Yet firms often invest multiple times within the same host country, which raises the question of whether firms agglomerate with their competitors' or their own prior investments. Collocation's attractiveness also may vary as a firm's entry motives evolve. The activities of prior and present investments often differ - initial investment may be for distribution while later ones might be for manufacturing. For Japanese investment into the United States in the electronics sector from 1980 to 1998, we find that firms tend to collocate only with their own prior investments. The exception is firms with little of their own experience, who tend to collocate with competitors. These results demonstrate the importance of firm heterogeneity in determining agglomeration behavior.

Suggested Citation

Chung, Wilbur C. and Song, Jaeyong, Sequential Investment, Firm Motives, and Agglomeration of Japanese Electronics Firms in the United States. Journal of Economics & Management Strategy, Vol. 13, No. 3, pp. 539-560, September 2004. Available at SSRN: https://ssrn.com/abstract=584207

Wilbur C. Chung (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

HOME PAGE: http://www.rhsmith.umd.edu/faculty/wchung/

Jaeyong Song

Yonsei University, Seoul Campus, College of Business and Economics ( email )

Yonsei University
Seoul
Korea
82-2-2123-2498 (Phone)
82-2-364-6887 (Fax)

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