Paper short abstract:

This paper examines the question of capital and labor mobilities between a cross-border skilled labor market between Japan and Vietnam. The study addresses the role of the government in this market, and how does Japanese private actor begin to establish the cross-border labor market.

Paper long abstract:

Despite the recent introduction of the new foreign labor policy, the Japanese government is still reluctant to implement an official migration or immigration policy. To fulfill the labor need, the Japanese companies seek their necessary skilled labor from abroad. This paper studies the Japanese capital mobilities and the cross-border labor market between Japan and Vietnam. Aotagai, referred as 'purchase when the field is still green' is a known strategy in new graduate recruitment, and the Japanese firms apply it in the cross-border labor market. Particularly for Japanese small and medium-sized enterprises (SMEs), securing their recruitment channels is prerequisite for their skilled workforce supply. Despite the country's unwillingness to implement an official migration or immigration policy, the government actually assists in the establishment of the skilled cross-border labor market, and this study examines the activities of the government and the private actor by analyzing both capital and labor mobilities. This paper addresses following research questions: How do Japanese private actors establish the cross-border labor market? To what extent the Japanese government involve in the establishment of cross-border market between two countries? To answer these research questions, this paper focuses on the cross-border labor market of engineering and IT sectors between Japan and Vietnam. The latter country attracts business interest from other Asian countries, and this was observed as a form of Foreign Direct Investment (FDI). The study applies qualitative methods, and the fieldwork was conducted both in Japan and in Vietnam. This research has main two findings; the Japanese official development aid (ODA) contributes to establish a basis of cross-border labor market. Secondly, under the severe competition with other Asian firms, the Japanese business establishes a cross-border labor market with the use of basis funded by the government, and the firms approach to the skilled foreign candidates at the early stage, secure and form the skilled labor in the cross-border labor market. Based on these findings, the paper argues that the Japanese business exercises a main role in the establishment of the cross-border labor market, but it was not feasible without the government capital mobility.