Theorizing multilevel geoeconomics: Japanese Business Reinvention in Europe

With the turmoil associated with the Brexit vote in 2016, many Japanese MNCs started to prepare for relocating their activities out of the UK. It was an event that have geoeconomic implications at different levels. First it reshapes the economic map of the Single Internal Market and its connection to the recently signed Economic Partnership Agreement between the EU and Japan. Secondly, this will have an impact on the firm level. Thus, this paper aims at bringing geoeconomics on the macro level together with the potential impact of firms on the micro level. The paper grounds the analysis within political economy and economic geography. This theoretical foundation enables the analysis to contribute to a deeper understanding of how firms respond to and potentially drives the political development of trade and investment relations. Hence, the conceptualization discussed in the paper strives to examine how geoeconomics alter the flows of goods and services, but also to map how this translates into a new configuration of industrial dynamics and economic geographical footprint. Japanese MNCs has a long history of investments in Europe. Japanese FDIs, ranging from being natural resource-seeking to strategic asset-seeking investments, to the EU can also be seen as a result of an organizational and managerial reorientation of the Japanese corporate landscape that did start by mid-1990s as a direct result of the bursting of the Bubble economy and subsequently the political economic implications. The paper studies the longitudinal change of Japanese firms active in Europe and the potential implication of the shifting geoeconomics. Changing industrial dynamics are important since it maps the intricate value chains that are results of trade agreement on the macro level and firm level strategy. In order to empirically connect the conceptualization, the case of Sweden is used. We know much about Japanese FDI in core member countries of the EU, but much less about the flagship investments in peripheral Europe. In this study, we are taking Sweden as an example of a highly developed European industrial nation, home of several world-leading companies and the scene for important Japanese acquisitions of world market-leading companies, and where the location within the Single Internal Market constitutes an obvious economic attraction. The case enables a connection to the changing geoeconomics and how Japanese firms respond to secure market access and connection to competence and labour that could strengthen the position in Europe and the world market.