Japanese foreign direct investment in India: An institutional theory approach

This article charts the history of Japanese corporate engagement with India. While there has been a profound historic relationship between the two nations, economic interaction is commonly portrayed in the context of geographical and psychic distance. As institutions set the rules of corporate engag...

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Bibliographic Details
Published in:Business history 2012-08, Vol.54 (5), p.657-688
Main Authors: Buckley, Peter J., Cross, Adam R., Horn, Sierk A.
Format: Article
Language:English
Subjects:
Corporate bonds
Economic history
emerging economies
Foreign direct investment
Foreign enterprises
Foreign investment
Foreign investments
History
India
Industry
Institutional change
international corporate strategies
Japan
Markets
Multinational corporations
Multinational enterprises
Nationality
Organization theory
Organizational change
Regulation
Studies
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Summary:This article charts the history of Japanese corporate engagement with India. While there has been a profound historic relationship between the two nations, economic interaction is commonly portrayed in the context of geographical and psychic distance. As institutions set the rules of corporate engagement, we analyse the evolving regulatory and policy regime for foreign direct investment (FDI) in post-independence India and the corporate strategies of Japanese multinational enterprises (MNEs) in response to this institutional change. Using a firm-level dataset we show that the trajectory of Japanese investment in India broadly follows that of other nationalities of foreign firms. Differentiated responses to institutional changes are detected by industry. Our analysis reveals important instances of Japanese firm flexibility and pragmatism vis-à-vis the rapidly growing Indian market.
ISSN:0007-6791
1743-7938
DOI:10.1080/00076791.2012.683417