The political economy of industrial location: The case of Japanese auto transplants

Fanying Kong, Purdue University

Abstract

The purpose of this research is to present a theoretical framework for examining the political and economic forces involved in the location of Japanese auto transplants in the Midwest corridor of the United States. The research targets five wholly Japanese owned transplants. We present three theoretical models as a conceptual scheme for guiding the inquiry. The organization/resource dependence model suggests that sufficient task-related resources are needed for the organization to survive and to be effective in terms of meeting the challenge of competition and profitability. The state model focuses on the role of political/administrative structures that could facilitate industrial recruitment. The state must sustain the institutional conditions necessary for industrial expansion which serves as the driving force of economic growth. In a class perspective, investment actions and organizational interests are understood via the conflicts between labor and capital inherent in capitalist production. States that attracted Japanese transplants are compared with competitor states on empirical indicators of the organization, state, and class models. The similarities among all the winner states and the critical differences between the winner states and the states within the final list in each case are identified using case comparative methods. Regression analysis of variables from all three models is carried out for winner vs competitor states, and winner and competitors vs others. The research results indicate some consistency between our theoretical framework and the empirical evidence in the organization/resource dependence model and the state model. The concentration of auto related firms is a most significant factor for all the winner states, which meets the resource requirement for Japanese' "just in time" production system. The governments in all the winner states are very active in attracting foreign investments and have a greater administrative capacity to compete for Japanese transplants. The level of unionization, labor militancy, and manufacturing wages did not distinguish between winner and competitor states. The weakness of the class model is probably due to the transplants need for skilled workers, and the general weakness of labor across the country.

Degree

Ph.D.

Advisors

Perrucci, Purdue University.

Subject Area

Sociology|Business costs|Political science

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