Spatial characteristics and strategies of Japanese-affiliated companies in the Midwest of the United States: Localization or specialization?

Abstract

Spatial and sectoral patterns of Japanese-affiliated companies, in both the manufacturing and service sectors, in the Midwest and their strategies have been examined based on a database compiled by the author and field research. Japanese-affiliated companies in the Midwest are likely to be located in large cities, particularly in the Chicago and Detroit Metropolitan Areas, where a suburbanization of location is in progress. Although the service sector surpasses the manufacturing sector in the number of operations in Illinois, Michigan, Minnesota, and Kansas, the manufacturing sector dominates the service sector in the number of employees throughout the Midwest. While the manufacturing sector is pursuing a localization strategy, the service sector is divided into two groups: companies which are adopting or shifting to a localization strategy and those which are maintaining a specialization strategy. For the latter group, the agglomeration of other Japanese-affiliated companies is crucial for their location.