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An overseas business paradox: Are Japanese general contractors risk takers?
Taichi Mutoh1, Koji Kotani2,3,4,5, Makoto Kakinaka6,7,4
1Myanmar Office, International Marketing and Business Development Division, Taisei Corporation, Yangon, Myanmar.
Abstract:
Japanese industries have struggled with stagnation after the collapse of bubble economy in the 1990s. Such a financial crisis has led to overseas business expansion of Japanese industries. This study empirically examines Japanese general contractors' overseas operations over the post-bubble period in relation to their financial status. The result shows that general contractors facing financial distress expand overseas business aggressively, when the domestic market shrinks. This result is opposite to conventional wisdom that stronger entities expand their territories of operations, thus "overseas business paradox." However, it can be considered a new scenario of industries' evolution when a country's economy matures.
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