The Motives for Joint Ventures: A Transaction Costs Analysis of Japanese MNES in the UK

Emmanuel Cleeve

Scottish Journal of Political Economy, 1997, vol. 44, issue 1, 31-43

Abstract: What factors determine the choice of Japanese companies between part and full ownership of their UK subsidiaries? In seeking to answer this question, this study employs data of Japanese foreign direct investment (FDI), through joint ventures, in the UK, not previously used. The main findings of the econometric work presented is that transaction costs are the principal consideration when Japanese firms choose between part and full ownership of their UK subsidiaries{softhyphen}. Variables that have featured prominently in studies relating to either US parents or for subsidiaries in the US do not appear to play a significant role. The European Union (EU) market appears to be the target of Japanese foreign direct investment in the UK.

Date: 1997
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