On the Myth of the Keiretsu Network: Japanese Electronics in North America

Mireya Solis

Business and Politics, 2003, vol. 5, issue 3, 303-333

Abstract: This study of Japanese consumer electronic networks in North America challenges conventional wisdom on the pervasiveness of keiretsu ties in Japanese production networks abroad. The consumer electronics industry poses hard questions to current views on the relationship between keiretsu and FDI not only because of the more modest internationalization of subcontractors, but more interestingly, because Japanese electronic production networks overseas remained remarkably closed to outside suppliers even in the absence of keiretsu commitments that could constrain purchasing decisions. This article offers a comparison of domestic subcontracting practices in the Japanese automobile and consumer electronic industries, a discussion of the internationalization of electronic part makers, and an analysis of the sourcing strategies of Japanese firms in North America. The article highlights the impact of the non-market environment in Japanese FDI strategies since Japanese companies embarked on foreign production in North America as a direct response to export caps imposed by the American government and/or tighter regional integration rules adopted in NAFTA. Revealingly, Japanese automobile and electronic firms diverged in their reliance on subcontracting firms to meet the more stringent demands for regional production.

Date: 2003
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