Characterising Japanese direct investment in Central and Eastern Europe: a firm level investigation of stylised facts and investment characteristics (original) (raw)
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Japanese Foreign Direct Investment in the Visegrád Four: Trends, Characteristic and Driving Forces
Foreign Policy Review, 2021
Japan continues to be the most important Asian investor in Poland and Czechia, and the second most important player in Hungary and Slovakia (after South Korea). Japanese multinationals, operating in the automotive, electronics and other industries, as well as in certain services, play an important role in the Central and Eastern European economies, enhancing the performance of the respective V4 economies. Although compared to, for instance, German MNCs' investment, Japanese MNCs represent a rather minor share in the total FDI stock of these countries, the number of companies increase year-on-year. The paper briefly presents the history and main trends of Japanese investment in the V4 region, maps out the main characteristics of Japanese investment flows, and identifies the driving forces of Japanese FDI within the V4 region. The last section of the paper also sheds light on a new opportunity for the V4 countries to attract more investment from Japanese companies, that is the Japanese companies' possible relocation to the V4 region from the United Kingdom, as a result of Brexit.
The Extent and History of Foreign Direct Investment in Japan
SSRN Electronic Journal, 2000
The past few decades have seen a significant rise in foreign direct investment (FDI) worldwide. While Japanese companies have actively contributed to this trend, FDI in Japan continues to be much lower than in other countries. This paper explores the history of both outward and inward FDI in Japan, looking in particular at the reasons for the low levels of inward FDI. New calculations for this paper -based on data from the Establishment and Enterprise Census -show that foreign firms' role in the Japanese economy may be substantially larger than the most frequently cited published statistics suggest. In some industries (motor vehicles and electrical machinery in particular), inward FDI penetration, as measured by the share of employment accounted for by foreign affiliates, in Japan in fact is on par with the United States. However, a large number of "sanctuaries" with almost no foreign involvement remain, so that FDI penetration overall is still very low. While to some extent, this can be explained by Japan's relatively isolated geographic location, historical factors play an important role. Throughout the centuries and until quite recently, Japan's rulers have viewed foreign involvement in the economy as a threat and consequently erected various barriers to FDI, which are discussed in detail.
Determinants of Japanese direct investments in selected BIMP-EAGA countries
2007
This paper uses panel data analysis to identify how Japanese multinational corporations (MNCs) allocate their investments in the selected BIMP-EAGA countries (i.e. Malaysia, Indonesia and the Philippines). The paper hypothesizes that the following six elements would influence the inflow of Japanese Direct Investments (JDI) into the area: country's market size, growth rate of market size, per capita income, trade deficit, inflation rates and political condition. The main findings from the panel data analysis are that there is a significant relationship between Japanese direct investments and political condition in the recipient countries. The inflows of Japanese investment tend to decrease as the political risk increases. It means that Japanese MNCs tend to allocate more investments into the countries with better political condition.
Characteristics and performance of Japanese foreign direct investment in Europe
European Management Journal, 1995
This article by Detlev Nitsch, Paul Beamish and Shige Makino provides an illuminating presentation of the characteristics and performance of 118 Japanese subsidiaries in Europe. The study is one of the few that contains performance data at the subsidiary level. Subsidiary performance is limited to the initial mode of entry, industry and country of entry, subsidiary size, and reasons for entering. Japanese investment in Europe grew significantly in the late 1980s, but was heavily concentrated in a few industries. Entry mode preferences have also shifted, away from greenfield start-ups to more use of joint ventures. Conclusions are of interest to European and non-European corporate managers, and public policy-makers. The European Union attracts the attention of managers in other parts of the world both as a source of serious global competitors, and as a compelling market for a multinational firm's products. This artide examines the latter point, looking at Europe as a manufacturing site from the point of view of Japanese manufacturing corporations with subsidiaries in the region. Europe has often been depicted in the popular and business press as a homogeneous entity, especially in the late 1980s and early 1990s as worldwide excitement about '1992' reached a fever pitch. Managers were exhorted to pay attention to 'EC '92', or to 'go to Europe', without regard for where their business would be located once behind the 'EC barrier'. Readers of this Journal are, of course, well aware that cultural, political, regulatory, and other differences exist between Western European countries. Indeed, many writers have described these differences, in this and other journals.
DETERMINANTS OF JAPANESE DIRECT INVESTMENT IN SELECTED BIMP-EAGA COUNTRIES
This paper uses panel data analysis to identify how Japanese multinational corporations (MNCs) allocate their investments in the selected BIMP-EAGA countries (i.e. Malaysia, Indonesia and the Philippines). The paper hypothesizes that the following six elements would influence the inflow of Japanese Direct Investments (JDI) into the area: country's market size, growth rate of market size, per capita income, trade deficit, inflation rates and political condition. The main findings from the panel data analysis are that there is a significant relationship between Japanese direct investments and political condition in the recipient countries. The inflows of Japanese investment tend to decrease as the political risk increases. It means that Japanese MNCs tend to allocate more investments into the countries with better political condition.
Japanese direct foreign investment and the Asian financial crisis
Geoforum, 2001
This paper examines the extent to which the Asian currency crisis of 1997±1998 impacted upon the behaviour of Japanese foreign direct investment (FDI) in the manufacturing sector. Much literature has claimed that transnational corporations (TNCs) are unlikely to be ®rmly embedded in the host countries where they operate. If this is the case, then Japanese ®rms in Asia might have exhibited a high degree of disinvestment or plant closure and transfer of operations to other countries following the onset of the ®nancial crisis. Although the events surrounding the Asian crisis and subsequent recovery are still unfolding, FDI data, surveys of Japanese ®rms, and initial reactions by Toyota Motor Corporation and Matsushita Electric Industrial were reviewed to examine this proposition. In general, the evidence suggests that Japanese TNCs have not¯ed Asia bur rather they responded in the following manner. First,¯ows of Japanese FDI into Asia overall held steady throughout ®scal year 1997±1998, although it was set to decline thereafter, at least for the short term. Second, at the level of individual corporations, there is some evidence to show that major ®rms have maintained their operations, and that they have shifted to an export-orientation so as to earn income from their Asian production in overseas currencies. Third, the survey evidence points to a long-term commitment to Asia by Japanese transnationals. Ó
The characteristics and performance of Japanese FDI in less developed and developed countries
Journal of World Business, 2004
Data on 26,857 Japanese foreign investments in 150 countries and regions over the 1991-1999 period reveal that there are stark differences in the characteristics and performance of Japanese FDI (JFDI) between less developed countries (LDCs) and developed countries (DCs). JFDI in LDCs has been growing more rapidly over the period, and it is concentrated in the Secondary industrial sector, with a lower level of control within a subsidiary, and has been initiated by parent firms with market-seeking and labor-seeking purposes and with relatively weak ownership advantages. In contrast, JFDI in DCs has maintained relatively stable growth over the period, is concentrated in the Tertiary industrial sector, with a higher level of control within a subsidiary, and has been initiated by parent firms with market-seeking and strategic-seeking purposes and with relatively strong ownership advantages. JFDI in LDCs tended to attain a higher financial performance and a lower exit rate, yet with a greater variance, than those in DCs.
Economia e politica industriale, 1998
This paper uses dynamic panel data methods to examine the determinants of Foreign Direct Investment (FDI) into Central and Eastern European Countries (CEECs). Our empirical model shows that the traditional determinants, such as market potential, low relative unit labor costs, a skilled workforce and relative endowments have significant and plausible effects. In addition, transition-specific factors such as the level and method of privatisation, and the country risk, play an important role in determining the flows of FDI into the CEECs and help explain the different attractiveness for FDI of the individual countries.