ABSTRACT
The debate about whether significant differences exist between operations of US and Japanese multinational enterprises (MNEs) in developing Asia has a long history. It has been often claimed that operations of Japanese MNEs affiliates are a relatively closed system with tightly controlled buyer-supplier linkages (Belderbos 1997, Borrus et al. 2000, Encarnation 1999, Lipsey 1998). On the other hand, operations of US MNEs are often described as an open system characterized by fully-integrated modularity and extensive use of subcontractors and contract manufacturers (Sturgeon 2003). Some of the early studies, while acknowledging these differences, have argued that with the passage of time operations of Japanese MNEs would become similar to those of their US counterparts as the former gain maturity and the ongoing process of globalization forces firms to emulate international best practices in global business operations. A more recent study has in fact found some evidence in support of this ‘convergence’ hypothesis (Dunning et al. 2007). There is also evidence that international cost pressure has contributed to increasing use of outside manufacturers by Japanese MNEs (Paprzycki 2004, Ando and Kimura 2005, Sturgeon 2003).
