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Liability of Foreignness and the Uses of Expatriates in Japanese Multinational Corporations in the United States
Author(s) -
Matsuo Hisako
Publication year - 2000
Publication title -
sociological inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.446
H-Index - 51
eISSN - 1475-682X
pISSN - 0038-0245
DOI - 10.1111/j.1475-682x.2000.tb00898.x
Subject(s) - multinational corporation , liability , business , sociology , law and economics , law , political science , economic geography , economics
This paper examines the factors which determine the use of expatriates (parent company managers) in Japanese multinational corporations in the United States, addressing the issue of “liability of foreignness” in establishing new ventures in an international context. The paper attempts to explain theoretically the variance in the proportion of expatriates used across these United States subsidiaries, drawing on the resource dependence theory. Previous research suggests that when liabilities of foreignness are high, and when there is a need to develop organizational forms that insure reliable resource flows to coordinate activities, then Japanese multinational corporations will substitute expatriates for local personnel. Data on 3,119 corporate establishments are derived from the section on the United States of Kaigai Shinshutsu Kigyo Soran [List of Japanese‐Owned Firms Abroad] (Toyokeizai 1995), seeing Japanese expatriates as agents who engage in transactions of necessary resources with surrounding corporations and with the parent companies.