Foreign Owned Firms in Japan

Topics: Employment, Human capital, Capital Pages: 2 (278 words) Published: January 31, 2013
Ono, Hiroshi. 2007. April 2007 issue of the American Sociological Review

The research focused on Japanese workers working for Japanese companies and Japanese workers working for foreign owned companies. The discussion focuses on the Japanese employment system, touching on lifetime employment and how it is ingrained in the structure of Japanese companies.

Japanese Firms
• Japanese companies are less likely to layoff or downsize. • Their culture is to retain as many employees as possible. Re-training is expensive.

• During slow times a Japanese company will reassign employees to other task when possible.

Foreign Firms
• Pay is a lot higher for employees of foreign owned companies. • Pay is also usually based on performance, or the outcome of a task. • Foreign owned companies are prone to layoff or downsize employees when business is slow.

1- Trust between employers and workers will be lower in foreign firms in comparison to Japanese firms.

2 - Workers in foreign firms will feel less secure about their jobs. 3a - Workers in foreign firms will have a higher propensity to quit. 3b - Returns to general human capital will be greater among workers in foreign firms. 3c - Returns to firm-specific human capital will be lower among workers in foreign firms. 3d - Previous job changes will be penalized less among workers in foreign firms.

4 - Workers in foreign firms have higher earnings.
5 - The gender earnings gap will be smaller among the foreign firms.


The Japanese workers can enjoy lifetime employment with Japanese firms, while some Japanese employees have the option to make higher wages with foreign owned firms. It just depends on what the worker is willing to give up in the end.

Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Japan Foreign Policy Essay
  • Essay about the firm
  • IT firm Essay
  • Essay about The Firm
  • Essay about Japan
  • Japan Essay
  • Essay on Japan
  • Japan Essay

Become a StudyMode Member

Sign Up - It's Free