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Keywords:

  • ASEAN;
  • electronics industry;
  • Japan;
  • MNCs;
  • subsidiary development

Abstract

This paper contributes to the theory of subsidiary evolution in multinational corporations through utilising a value chain approach. It assesses the changing activities of the branches of Japanese electronics firms located in Southeast Asia (the ASEAN region) since the 1997–1998 financial crisis. In the paper, we argue that a modest development of Japanese subsidiaries has occurred in this region during the past 10 years or so. We connect models of subsidiary development to Michael Porter's value chain in the results of a set of interviews with 37 managers in the factories, sales offices and regional headquarters of Japanese subsidiary companies located in Singapore, Malaysia and Thailand. We show that decentralisation of management functions from Japan occurred in both primary and support activities of the value chain. However, corporate long-term research and development did not disperse to Southeast Asia and is unlikely to in the near future. The article interprets these results and highlights the need for further research relating to the evolving geography of Japanese electronics multinational corporations and their subsidiaries in Southeast Asia.