The Determinants of Business Expansion under the Geopolitical Risk

Abstract

We examine traits of Japanese multi-national enterprises which expand U.S. businesses under the U.S. president Trump’s unexpected political condition as a potentially “geopolitical risk”, by analyzing the structured questionnaire to them and their financial data. The logistic regression analysis reveals that labor productivity and a positive expectation to the economic stimulus policies affect significantly a decision-making to expand U.S. businesses, while an effective global governance structure has not yet been formed in Japanese multi-national enterprises.