Japanese Firms in Global Firm Networks

Author Name TODO Yasuyuki (Faculty Fellow, RIETI) / KASHIWAGI Yuzuka (Waseda University)
Creation Date/NO. March 2017 17-P-004
Research Project Firms' Domestic and International Networks
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This paper examines the characteristics of Japanese firms in global firm networks. For this purpose, we adopt methods developed in network science to large-scale datasets that contain information on production, shareholding, and patent co-holding of global networks, comparing Japanese firms with U.S., European, and Chinese firms. Our main conclusions are as follows. (1) Most Japanese firms are not located in any of the three types of global networks. (2) In any type of global network, while Japanese firms are densely connected with each other, they are not connected considerably with foreign firms, particularly those in the center of the global network. (3) We therefore conclude that the diversity of ties of Japanese firms is lacking. Because existing studies often find positive effects of diversified networks on performance, we suggest policies that can connect Japanese firms with foreign firms, such as promotion of exporting activities and foreign direct investment of small and medium enterprises, overseas mergers and acquisitions, international research collaboration, and free trade agreements.