Explaining the poor performance of Japanese direct investment in the United States

The poor performance of U.S. affiliates of Japanese firms appears largely due to adherence to the Japanese style management by Japanese firms. The heavy reliance on parent firms and subcontracting system for the procurement of parts, and technology transfer through on-the-job training have incurred substantial cost. Rushed undertaking of FDI in response to trade restrictions resulted in inadequate pre-project evaluation, leading to poor performance.