Foreign-Owned versus Domestically-Owned Firms: Economic Performance in Japan

18 Pages Posted: 20 Jan 2007

See all articles by Fukunari Kimura

Fukunari Kimura

Keio University - Faculty of Economics

Kozo Kiyota

Keio University - Keio Economic Observatory

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

Kimura, Fukunari and Kiyota, Kozo, Foreign-Owned versus Domestically-Owned Firms: Economic Performance in Japan. Review of Development Economics, Vol. 11, No. 1, pp. 31-48, February 2007. Available at SSRN: https://ssrn.com/abstract=958412 or http://dx.doi.org/10.1111/j.1467-9361.2006.00347.x

Fukunari Kimura (Contact Author)

Keio University - Faculty of Economics ( email )

2-15-45 Mita, Ninato-ku
Tokyo 1088345
Japan

Kozo Kiyota

Keio University - Keio Economic Observatory ( email )

Mita 2-15-45, Minato-ku
Tokyo, 108-8345
Japan

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