Uncertainty, Imitation, and Plant Location: Japanese Multinational Corporations, 1990-1996

In a study of a sample of 2,705 international plant location decisions by listed Japanese multinational corporations across a possible set of 155 countries in the 1990-1996 period, we use neoinstitutional theory and research on political institutions to explain organizational entry into new geograph...

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Bibliographic Details
Published in:Administrative science quarterly 2001-09, Vol.46 (3), p.443-475
Main Authors: Henisz, Witold J., Delios, Andrew
Format: Article
Language:English
Subjects:
2600
9130
9179
9510
Administrative science
Asia & the Pacific
Buildings and facilities
Business enterprises
Business structures
Business studies
Decision theory
Diversification
Economic uncertainty
Enterprises
Experimental/theoretical
Financial investments
Foreign direct investments
Foreign investments
Gross domestic product
History
Host country
Hypotheses
Imitations
Industrial plant locations
Influence
International business enterprises
Investment banking
Investment strategies
Japan
Location
Location of industry
Management science/operations research
Market entry
Multinational corporations
Multinational enterprises
Peers
Plant location
Political systems
Site selection
Studies
Tariffs
Uncertainty
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Summary:In a study of a sample of 2,705 international plant location decisions by listed Japanese multinational corporations across a possible set of 155 countries in the 1990-1996 period, we use neoinstitutional theory and research on political institutions to explain organizational entry into new geographic markets. We extend neoinstitutional theory's proposition that prior decisions and actions by other organizations provide legitimization and information to a decision marked by uncertainty, showing that this effect holds when the uncertainty comes from a firm's lack of experience in a market but not when the uncertainty derives from the structure of a market's policymaking apparatus.
ISSN:0001-8392
1930-3815
DOI:10.2307/3094871