An empirical investigation into the internationalization patterns of Japanese firms
Abstract The existing theories of firm level multinationality, together with the many patterns of internationalization traced by firms, suggest that there is no standard or optimal path of international expansion. Whether firms internationalize slowly or rapidly, the common dimension is time. We conduct a unique longitudinal analysis on the changing patterns of multinationality of Japanese firms listed on the Nikkei 225 over a 16 year time period from 1998 to 2013. We use the system developed by Aggarwal, Berrill, Hutson and Kearney (2011) to classify the degree of multinationality of each firm in each year using both accounting (sales) and non accounting (subsidiary) data. We use three measures of multinationality foreign sales per cent, location of sales and location of subsidiaries. Our results show that multinationality has increased over time and we find little evidence that firms are regional in their operations with a growing number of firms becoming trans regional and global. Our industrial analysis shows Consumer Goods and Oil Gas are the most multinational industries. While Consumer Services and Utilities are the least multinational.