Essays on Japanese and U.S. multinational enterprises.

摘要

The purpose of this dissertation is to improve our understanding of multinational activity and their motivations for establishing overseas subsidiaries in the case of Japan and the U.S. Chapter 2 analyzes the role of exchange rate movements in determining cross-border mergers and acquisitions (M&A) deals for the period 1986-2002. I find that a 10 % real depreciation in the domestic currency relative to the foreign currency is associated with a 0.6 % increase in the number of foreign acquisitions of the domestic firms. However, the size of the estimated effect declines once accounting for stock market performance and the aggregate number of patents given to residents in acquiring and target countries. This possibly suggests that the relative wealth and technology-seeking motives of acquisition investment partly explain the link between currency movements and cross-border M&A.;Chapter 3 reconsiders market access and factor endowment explanations of foreign direct investment (FDI) by exploring the potential sources of mixed evidence for the knowledge capital model. Using panel data on Japanese and U.S. MNE in the period 1989-2002, I find that Japanese affiliate sales are positively associated with unskilled-labor abundance in a host country, consistent with a vertical motive of FDI. In contrast, U.S. affiliate sales have a positive correlation with skilled-labor abundance in a foreign country, consistent with a horizontal motive of FDI. This finding helps explain why previous work using U.S. MNE data finds mixed support for the factor endowment explanation.;Chapter 4 examines the structure of Japanese and US multinational activity by using their foreign affiliate sales disaggregated by destination markets in the period 1989-2002. The data show that their foreign affiliates in both high- and low-income economies served primarily local markets and exported only small shares of their goods to their home markets in the 1990s. However, affiliate exports to third markets gained in importance over time. I also find that various measures of foreign affiliate activities are correlated negatively with wage premiums to middle managers, suggesting the crucial role of middle management skills in attracting offshore production by multinational firms.