Economic Barriers for Foreign Affiliates in Japan: The High Cost of Local Labour

Investigates an economic barrier for foreign affiliates in Japan,the high cost of local labour: to attract qualified workers, foreign affiliates must pay a basic wage premium and offer fewer hours of work over their Japanese counterparts, a factor which reduces cost flexibility and impairs foreign competition in the Japanese market. Foreign affiliates′ inability to offer employment security is a plausible explanation for such wage premium.