David W. Edgington

The In Situ Upgrading of Japanese Electronics Firms in Malaysian Industrial Clusters

Abstract The ability of clusters generated by direct foreign investment (DFI) in emerging economies to generate sustained, value-added growth is a matter of controversy. This article assesses this debate with reference to the role of Japanese electronics multinational corporations (MNCs) in the development of clusters in Malaysia. Conceptually, we present a typology of DFI-generated industrial clusters that represent increasing degrees of commitment to local value creation and upgrading. Empirically, we conducted a survey of 10 Japanese firms in Malaysia that examined whether or not their factories increased technological upgrading, increasingly embedded their operations through using local skilled labor and supply firms, and responded positively to national policies and cluster-governance measures supporting the electronics industry. We found that Japanese firms had clearly moved beyond simple assembly-based to embedded clustering but had not progressed further to technology-intensive behavior because of the poor technological environment in Malaysia, as well as Japanese MNCs’ strategies that depend on technology from headquarters. Nonetheless, Japanese MNCs were sufficiently embedded in Malaysia to upgrade production to digital consumer products, and semiconductor assembly has flourished, warding off competition from China and low-cost locations in the Association of Southeast Asian Nations. At the end of the study period, Malaysia remained an attractive location for Japanese electronics MNCs.

“Glocalization” and Regional Headquarters: Japanese Electronics Firms in the ASEAN Region

For Japanese multinational corporations (MNCs), glocalization (dochakuka) refers to the challenge of balancing the need to adapt foreign subsidiaries to local circumstances and to integrate corporate operations as a whole. This article addresses the regional headquarters (RHQ) strategies of electronics MNCs in the Association of Southeast Asian Nations (ASEAN) region. From the perspective of corporate governance, RHQs are at the fulcrum of the idea of glocalization. RHQs are understood in terms of the reciprocating relations between corporate structure and corporate strategy that change over space and time. The evolution of RHQs reflects developments by Japanese firms in Singapore itself, across ASEAN, and in the rest of Asia, and how (Japanese) corporate governance is organized within the Asia-Pacific region as a whole, in contrast to the other triad regions of Europe and North America.

Restructuring Japan’s Rustbelt: The Case of Muroran, Hokkaido, 1985-2010

The crisis of Japan’s political economy raises the question of how it has dealt with the restructuring of its peripheral industrial regions, and the degree to which it has embraced neoliberal policies. I argue that the spread of neoliberalism in Japan has been uneven, shaped by local settings and adopted only selectively. To make this case, the article focuses on restructuring in Muroran City (2010 population, 94,600), a city of steel and heavy industry that lies on the southern coast of Hokkaido. I examine the changing fortunes of Muroran over the 1985-2010 period based upon a number of site visits made in the last 25 years or so. Set against contemporary industrial restructuring in Japan, the article evaluates the actions of the city’s major employer (Nippon Steel Corporation), central government ministries, and programs of the City of Muroran. The results show that despite the rise of the neoliberal rhetoric in Japan, restructuring in Muroran reflected a commitment to manufacturing and the local workforce by corporate as well as central and local governments.

New Relationships between Japanese and Taiwanese Electronics Firms

This paper examines the cultural dimensions of production networks between Japanese and Taiwanese firms. Conceptually, we argue that, due to historical and cultural ties between the two countries, as well as long-standing associations with Taiwanese suppliers, Japanese lead firms have deepened their relationships as Taiwan has entered a more technologically based stage of development. Taiwan has also been pivotal in Japan–Taiwan–China relations because of its cultural as well as geographic proximity to the two economic giants. Empirically, the analysis draws on interviews with sixteen Japanese electronics companies in Taipei and Hsinchu Science City, as well as secondary data concerning Japanese trade and investment in Taiwan. We contend that Japanese lead firms have moved to a position of insiders and partners with their Taiwanese suppliers in the information, technology, and communications sector. In addition, Japanese electronics firms now see Taiwan as a viable bridge to production and markets in China, while corporate relations are moving towards heterarchical or matrix arrangements, away from the hierarchical flying geese model. The study notes that there are challenges and limits to these new forms of relations.