Mobile Elite in the Global City: International Managers’ Locational Preference

Abstract

The globalization process is resulting in an acceleration of the concentration of corporate functions of foreign firms in first-tier global cities. In the last decade, Japan has received inward investment in large amounts. This investment is mainly flowing to Tokyo, which functions as Japan’s most important market entry point and business environment. The number of foreign firms has risen drastically in this first-tier global city in recent years. In 1974 only 150 non-manufacturing firms and 129 manufacturing firms had invested in Tokyo. Thirty years later, according to the Ministry of International Trade and Industry (MITI), the number had increased to 1440 foreign companies, among them 1085 non-manufacturing firms. By comparison, the second-tier city Osaka did not achieve the same growth rate for international businesses. With 136 companies, this second-tier global city lags behind even Yokohama-Kanagawa, which has attracted 201 foreign firms (MITI 2005). Additionally, since the 1960s and still ongoing, domestic and foreign companies have been shifting their headquarters functions to Tokyo (Hirai 2004). Although costs there tend to be the highest within Japan, most new investors consider locating only in the first-tier city of Tokyo. The concentration of globally linked economic functions goes hand in hand with the expensive lifestyle of the new top corporate officials, including foreign executive managers. This process is embodied by new landmarks such as Ark Hill and Roppongi Hills. Here, we can observe quick circulation of managerial knowledge among new members of the international corporate elite that integrates local and foreign business leaders.