A Case Study of Creating Shared Value by Japan and China Governments
Authors:   Asia-Europe Perspective Association, Jung Moosup , Pyo Minchan , Kim Sunmin 
Published: June 2018

Recently the multinational enterprises are required not only to take philanthropic responsibilities but also create economical and social benefits to host countries. CSR(Corporate Social Responsibility) became very important for MNEs to survive in foreign markets. Porter and Kramer(2011) developed the new concept about Creating Shared Value(CSV), “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates.” The first initial ‘C’ in CSR represents 'Corporate', but the initial ‘C’ in CSV does 'Creating', which means that the implementation bodies of CSV are not limited to corporate. According to the Stakeholder model, firms have impact on a variety of subjects such as customers, communities, government, employees as well as shareholders. These stakeholders ask firms social responsibilities and firms could obtain legitimacy by meeting the stakeholders’ demand.
Large-scale investment is required for developing countries to escape from poverty, because countries can increase the efficiency by the effects of scale and scope economies. The government's aggressive industrial policy can play an important role in encouraging firms’ motivation of investment. Porter(1990) developed the Diamond Model which explains factors affecting on the nation's competitiveness. The Diamond Model consists of the four factors, such as (1) firm strategy, structure, and competitive rivalry, (2) factor endowments, (3)domestic demand conditions, (4) related and supporting industries. In addition to these four factors, (5) Government and (5) Chance, exogenous variables, are also important factors influencing on the formation of a competitive(Mehrizi and Pakneiat, 2008). Government should establish proper economic policies allocating labor and capital efficiently. Political stability is also an important for economic development, which is also a role of government.
This paper compared CSV with CSR throughly and examined the role of government in creating shared value. This paper also analyzed cases of the Japanese and Chinese governments to find the proper functions making the business environment where the economic and social conditions can be better off.
Japan used ‘One-Voice, One-Package’ strategy for entering developing countries. One-Voice represents the close cooperation between the government and enterprises for investing in developing countries. One-Package means that Japan offers a whole system for host country’s economic development rather than each equipment separately. Delhi-Mumbai Industrial Corridor project is a good example of CSV between Japan and India. Through this project, India could establish the backbone of economic development, railways, connecting urban and rural society. Japanese firms could gain profit by participating in the project.
The Chinese government tried to sustain positive relationships with African countries, which created favorable business environment for Chinese companied running businesses in Africa. In addition, Chinese state-owned banks offered loans to African countries at low interest. Based on theses support from Chinese government, Chinese firms gained profits by participating on infrastructure projects in Africa. For example, Sinopec joined the project of oil exploration in Nigeria in 2004. CNOOC and CNPC also obtained the project oil exploration in Nigeria in 2006.
Recently Korea's economies is stuck on a plateau of slow growth. The entering into emerging markets may become the growth engine of Korea and CSV can be a useful tool for finding business opportunities in emerging markets. According to the findings, the home country government should try to set up a friendly relationship with host countries and, in addition, provide financial supports to home country firms as well as local government to stimulate CSV.