Foreign Multinational Corporations and Japan's Evolving Syncretic Model of Capitalism

Kenji Kushida analyzes foreign multinational corporations in Japan, particularly in the financial, automobile, pharmaceuticals, and telecommunications sectors that absorbed massive foreign direct investment inflows after the mid-1990s. He finds that regulatory shifts, driven by political logic, reshaped the competitive environment facing the foreign firms. Not only were formal and informal entry barriers removed, but the rules governing industry dynamics shifted to the advantage of the business models of foreign firms over those of the domestic incumbents. The distinctive characteristics of Japan's political economy, such as the main banks, long-term labor, and keireitsu corporate groups, which had hitherto made it difficult for foreign firms to compete in Japan, actually were transformed functionally to aid foreign firms in making inroads into Japanese markets. Foreign firms often exploited gaps in the new regulatory structure, and took advantage of their ability to o er alternative employment structures and the slow adjustment of incumbent Japanese firms. They did not replace major Japanese firms, but they introduced new norms and practices that coexisted and melded syncretically with the older, pre-existing norms and practices