Possibility of Sustainable Entry into Overseas Port Operation Markets by Japanese Companies

Round 1

Reviewer 1 Report

1. The analysis of interview results does not well reflect the interview contents in Table 1. For example, interview contents about “future entry intentions and target market” and “desired mode of entry” are important, but they are not involved in subsequent discussion.

2. In line 194, Kitakyushu Port PFI project is mentioned. The full name of PFI should be explained. PFI has never appeared in other parts of the paper.

3. In line 388, it says “the Japanese government recognizes the Thilawa Port project as best practice”. Its successful experience is worth learning. The authors can further explore the experience. For example, why the Japanese government chose this port? What policy support has it received?

4. In line 463, it says “there have been many cases of withdrawal by trading companies”. However, the reasons or lessons are not analyzed. This is very enlightening for the policy formulation of companies and government.

5. Some quantitative method can be applied in evaluating the Possibility of sustainable entry into overseas port operation.

Author Response

Response to Reviewer #1

Comments

1. The analysis of interview results does not well reflect the interview contents in Table 1. For example, interview contents about “future entry intentions and target market” and “desired mode of entry” are important, but they are not involved in subsequent discussion.

Response 1:

We agree with your comment, and have revised as follows;

“According to the interviews, companies with a certain level of experience are positive about their future entry intentions because they have enjoyed the benefits of entry, while companies that have recently entered the market will make a decision on future entry depending on the evaluation of their first project, and inexperienced companies have no intention to enter the market. In other words, familiarity with the market and the benefits of entry are thought to lead to continued entry. With regard to the target markets of the companies indicating their intention of entry, they all share the same desire to enter growing markets, especially Asia in the immediate future and Africa in the future. As for the desired mode of entry, they do not seem to adhere to a particular one but are prepared to respond depending on the project. However, the results show that trading companies, port operators, and POCs, in that order, desire a higher degree of control. The stevedores prefer to cooperate with shipping companies rather than enter the market alone from the perspective of attracting shipping companies, while the POCs recognize that minor investment is the limit at this point due to the challenges of human resources, substantial management know-how, and financial capacity.” (line 491-506)

 

2. In line 194, Kitakyushu Port PFI project is mentioned. The full name of PFI should be explained. PFI has never appeared in other parts of the paper.

Response 2:

Your comment is correct. We have revised PFI to the full name, private finance initiative. (line 198)

 

3. In line 388, it says “the Japanese government recognizes the Thilawa Port project as best practice”. Its successful experience is worth learning. The authors can further explore the experience. For example, why the Japanese government chose this port? What policy support has it received?

Response 3:

In accordance with your comment, we have reviewed as follows;

“This is a best practice because: Japanese companies are involved from upstream to downstream processes, which is the government's goal; the government, JICA, and JOIN are involved, which facilitates private sector participation in the operation phase; and a stevedore is included in the operating entity, which is expected by the government. Increasing the number of entries through a similar process is the government's approach to promotion. According to the interviews with Sumitomo, as the project was an ODA project and JOIN participated in the project, it helped the company enter the market, including the formation of internal consensus. Government involvement and investment by JOIN seem to function as policy support, especially for firms that are unfamiliar with the market.” (line 409-418)

 

4. In line 463, it says “there have been many cases of withdrawal by trading companies”. However, the reasons or lessons are not analyzed. This is very enlightening for the policy formulation of companies and government.

Response 4:

In accordance with your comment, we have added as follows;

“Positive press releases regarding the withdrawal have been few and obtaining accurate answers in the interviews is difficult due to the confidential aspects of the withdrawal. As a characteristic of the industry, investment in ports is only one segment of many business portfolios, and therefore, there is internal competition for profitability with businesses other than port operations. If the return on investment is judged to be low, the company is expected to withdraw quickly. In the case where the company entered the port operations in combination with securing interests in natural resources, it may withdraw from the port operations and simultaneously withdraw from the resources in question. As described above, compared to industries whose main business is port-related, it is assumed that they tend to withdraw unhesitatingly without regard to their reputation within the market.” (line 366-376)

 

5. Some quantitative method can be applied in evaluating the Possibility of sustainable entry into overseas port operation.

Response 5:

In accordance with your comment, we have added the results of the quantitative analysis to Table 2, while adding as follows;

“Quantitative analysis should be limited because of the limitations on data on handling volume and financial information as the Japanese companies entering the over-seas market and those willing to disclose these information are few. However, we organized the information by region, entry mode, degree of control, and partners to provide a comprehensive view of the entry status. For the status of entry into overseas markets, we used press release materials and financial data of each company as data sources, supplemented by Drewry [8].” (line 138-144)

Author Response File: Author Response.docx

Reviewer 2 Report

In this paper, the possibility of sustainable entry into overseas port operation markets by Japanese companies was examined. Specifically, the authors' review port governance in Japan and the characteristics of the Japanese market in the global market for port operations and the status of the participation of domestic terminal operators in Japan and overseas, and the identify the possibilities and methods of sustainable inclusion in the future overseas port operations by interviewing representative companies. The authors finally provide policy suggestions in terms of both increasing entry opportunities and improving the entry environment. The paper needs some improvements. My detailed comments are as follows:

 

1. It is noted that the manuscript needs careful editing by someone with expertise in technical English editing paying particular attention to English grammar, spelling, and sentence structure so that the study is clear to the reader.
2. The abbreviation must be defined the first time it appears in the article, such as COSCO. Please check all abbreviations.
3. It is worth noting that as a research paper, it should not have any political orientation.
4. There is not enough valid data to support the results.
5. Avoid using extra-long sentences, unless you are sure it is grammar-error free. Please correct all.
6. In the section Conclusions, the authors need to sublimate the research significance of this article.

 

 

Author Response

Response to Reviewer #2

General comment

In this paper, the possibility of sustainable entry into overseas port operation markets by Japanese companies was examined. Specifically, the authors' review port governance in Japan and the characteristics of the Japanese market in the global market for port operations and the status of the participation of domestic terminal operators in Japan and overseas, and the identify the possibilities and methods of sustainable inclusion in the future overseas port operations by interviewing representative companies. The authors finally provide policy suggestions in terms of both increasing entry opportunities and improving the entry environment. The paper needs some improvements. My detailed comments are as follows:

Response:

We wish to express my appreciation to your insightful comments, which have helped us significantly improve the paper. Based on your general comment, we have revised thoroughly. Specific points of revision are as follows.

 

Comments

1. It is noted that the manuscript needs careful editing by someone with expertise in technical English editing paying particular attention to English grammar, spelling, and sentence structure so that the study is clear to the reader.

Response 1:

In accordance with your comment, we have taken the manuscript again for English proofreading. The certificate is attached.

 

2. The abbreviation must be defined the first time it appears in the article, such as COSCO. Please check all abbreviations.

Response 2:

Thank you for your comment. We have checked all abbreviations and have added full names to COSCO, PSA, NYK, MOL, K-Line, and HPC.

 

3. It is worth noting that as a research paper, it should not have any political orientation.

Response 3:

We do not intend to include any political orientation. However, in accordance with your comment, we have revised as follows to avoid any misunderstanding;

• We have revised "Policy suggestions" to "Future directions". (line 21, 67, 479, 577-578)
• We have revised the writing style in the literature review section that refers directly to politics as follows; "Karlis and Polemis [28] point out that COSCO's investment in the port of Piraeus was necessary for shipping and economic reasons; nevertheless, the motivation of this de-cision was not confirmed." (line 123-125) (originally, "Karlis and Polemis [28] point out that COSCO's investment in the port of Piraeus was necessary for shipping and economic reasons, but that the decision was primarily political.")
• We have removed the description "In China, BRI has triggered rapid overseas expansion in the form of a breakthrough by SOEs" in section 5.3.
• For example, we have revised the writing style to be as neutral as possible as shown as follows; "Considering this situation, the increase of entry opportunities by strengthening the policies currently in place and the improvement of the entry environment by re-forming port governance might promote the sustainable entry of Japanese companies, which lack experience and have capital challenges, into overseas port operations." (line 593-596)

 

4. There is not enough valid data to support the results.

Response 4:

In accordance with your comment, we have added Table S4. Also, we have added as follows;

“Quantitative analysis should be limited because of the limitations on data on handling volume and financial information as the Japanese companies entering the over-seas market and those willing to disclose these information are few. However, we organized the information by region, entry mode, degree of control, and partners to provide a comprehensive view of the entry status. For the status of entry into overseas markets, we used press release materials and financial data of each company as data sources, supplemented by Drewry [8].” (line 138-144)

 

 

5. Avoid using extra-long sentences, unless you are sure it is grammar-error free. Please correct all.

Response 5:

In accordance with your comment, we have corrected the entire manuscript and have taken the manuscript again for English proofreading. The certificate is attached.

 

6. In the section Conclusions, the authors need to sublimate the research significance of this article.

Response 6:

In accordance with your comment, we have added as follows;

“One significance of this study lies in revealing the entry status in the overseas port operation market by Japanese private companies, which have been active in an unique domestic market without overseas TOs and have a low presence in the global port op-eration market, with the exception of shipping companies. Furthermore, this study's approach of examining the entry status in relation to port governance systems and port policies is a significant academic contribution. The accumulation of studies on the entry of port-related firms into overseas port operation markets, which are affected by various port policies and port governance systems in each country following port re-forms, should provide a strong basis for predicting the port operation market in the world.” (line 597-605)

Author Response File: Author Response.docx

Round 2

Reviewer 1 Report

Accept after minor revision

Author Response

Response to Reviewer #1

Comments

1. Accept after minor revision (In the Review Report Form, "Can be improved" is checked only for the question "Are the conclusions thoroughly supported by the results presented in the article or referenced in secondary literature?”)

Response 1:

Thank you for your comment. We have added as follows in Conclusions;

“Although POCs are expected to expand overseas, their entry is limited to only minor investments through acquisition. Although Japanese shipping companies have been actively participating in overseas port operations, Mitsui is the only trading company that has participated continuously and Kamigumi is the only stevedore. In Japan, there are many stevedores that have the same level of experience and capital strength as Kamigumi but have not entered overseas markets. Although the trading companies have entered the overseas port operation market, there have been many withdrawals due to trial and error. The Japanese port governance system and the his-tory of port policy have influenced this situation.” (line 579-587)

Author Response File: Author Response.pdf

Reviewer 2 Report

The paper needs some improvements. My detailed comments are as follows:

 

 

1. The full name of COSCO is China Ocean Shipping Company.
2. Line 186: ‘been separated as in China, Korea, or Taiwan’. Taiwan is a part of China. It is inappropriate to juxtapose China with Taiwan.
3. Where are the supplementary materials? In Line 618, the description of Table S4 is also missing.

Author Response

Response to Reviewer #2

Comments

1. The full name of COSCO is China Ocean Shipping Company.

Response 1:

Thank you for your comment. We have revised the full name of COSCO. (line 33)

 

2. Line 186: ‘been separated as in China, Korea, or Taiwan’. Taiwan is a part of China. It is inappropriate to juxtapose China with Taiwan.

Response 2:

In accordance with your comment, we have revised as follows;

“Even after the port reforms, the PMBs in Japan have not been commercialized or corporatized, nor have PA operation functions been separated as in China or Korea [9,26], and port management is still part of local government administration.” (line 185-187)

 

3. Where are the supplementary materials? In Line 618, the description of Table S4 is also missing.

Response 3:

Thank you for your comment. We have added the descriptions of Table S4. (line 626-627) The supplementary materials are available for download on the system as a separate file.

Author Response File: Author Response.pdf