| The problem. Japanese multinational corporations (MNCs) were considered by many authors to be more geocentric than U.S. MNCs because they had invested in more countries, they adopted a long term approach to returns on investment, and they were better prepared to exploit market potentials of the most advanced developing countries. The study examined these key areas of difference between Japanese and U.S. MNCs in developing countries.;Method. The research design consisted of an extensive literature search and data collections from a sample of 40 Japanese MNCs and 60 U.S. MNCs concerning their direct investment in developing countries. These data were tabulated and compared by country groups classified according to U.N. economic status.;Results. The literature review demonstrated significant contradictions among writers about the direction of differences between Japanese and U.S. MNCs.;Analysis of the data revealed that U.S. MNCs had significantly greater numbers of affiliates in a significantly greater number of developing countries than Japanese MNCs did.;The principal differences between Japanese and U.S. MNCs, in terms of return-on-investment horizon, center on government involvement and investment objectives. Japanese MNCs have protected home markets, interlocking directorates, and managers willing to accept controls. Japanese MNCs produce in developing countries to use comparative advantages or to substitute for imports. U.S. MNCs, with unprotected home markets, strong anti-trust regulations, and managers desiring freedom from controls, invest in developing countries for re-export to the U.S. and regional markets. U.S. MNCs appear to have longer return on investment horizons than Japanese MNCs do.;In "tomorrow's markets," U.S. MNCs were shown to have greater than expected numbers of affiliates than Japanese MNCs did; U.S. MNCs also had greater new direct investment in Brazil and China.;The study also generated suggestions for further research into financial aspects of direct investment, market objectives of investment, and management attitudes about investment in developing countries. |
