No SDES-2014-10
Title An overseas business paradox: Are Japanese general contractors risk takers?
Author Taichi Mutoh, Makoto Kakinaka, & Koji Kotani
Abstract Japanese industries have struggled with stagnation after the collapse of bubble economy in the early 1990s, leading to overseas business expansion. This study examines Japanese general contractors’ overseas operations over the post-bubble period. The result shows that general contractors facing financial distress expand overseas busi- ness more aggressively, or are forced to do so, when the domestic construction market shrinks. This result is in contrast to conventional wisdom that stronger entities expand their territories of operations, and thus “overseas business paradox.” However, it can also be considered a new scenario of industries’ evolution when economy matures in a country.
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