Integrated Production in East Asia: Globalization without Insulation

Patricia Nelson

Japanese Economy, 2000, vol. 28, issue 5, 50-83

Abstract: Economic integration in East Asia was by 2001 a fact. It was characterized by the strong presence of Japanese multinational corporations (MNCs) that had expanded their manufacturing facilities to East Asia, particularly since 1985, and had integrated their production networks across several countries. It was also directly influenced by the rapid growth of China as an attractive target for foreign direct investment (FDI), especially during the 1990s. At the same time, Japanese MNCs were faced with high prices and continued stagnation at home. Compared with the cost of doing business elsewhere in East Asia, Japan was simply too expensive. This chapter explores how the globalization of Japan's multinationals (and their subsequent integration of production in East Asia) influenced the political economy of Japan, and specifically addresses a problem common to all advanced industrialized nations: the tension between highly globalized firms and the state.

Date: 2000
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DOI: 10.2753/JES1097-203X280550

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