1. ¹Warwick Business School, The University of Warwick, Coventry, UK
2. ²Kelley School of Business, Indiana University, Bloomington, USA

Correspondence: Simon Collinson, Warwick Business School, The University of Warwick, Coventry CV4 7AL, UK. Tel: +44 (0)2476 524508; Fax: +44 (0)2476 524628; E-mail: s.collinson@warwick.ac.uk

Received 15 September 2004; Revised 1 February 2007; Accepted 20 April 2007; Published online 3 January 2008.

Abstract

In the world's largest 500 firms, there are 64 Japanese multinational enterprises (MNEs) with data on regional sales, but only three operate globally; whereas 57 of them average over 80% of their sales and foreign assets in their home region. Why is there such a strong intra-regional dimension to their activities? Using empirical data and a new framework for analysing both downstream (sales) assets and upstream (production) assets we analyse why most large Japanese firms appear to have firm-specific advantages (FSAs) that are based in their home region. A structural contingency approach is applied to two case studies to explain how home-region-bound FSAs constrained the ability of Japanese MNEs to implement internationalisation strategies.