An interest in Japan: The political economy of Australia‑Japan investment linkages (original) (raw)

Politics of Foreign Direct Investment in Australia, 1960-1996

Australia long maintained an ‘open door’ policy towards FDI, with the limited exceptions of the banking, broadcasting and airline industries. From the late 1960s FDI was subjected to more general control and by the mid-1970s policy had been tightened considerably. From the mid-1980s the tightening of control over FDI was reversed and a period of sustained liberalisation followed. This history suggests two things to explain. Why did Australia turn away from its longstanding open door policy only to later reverse course. How can varying restrictiveness of FDI policy across industry sectors be accounted for. Recent literature on FDI policies and the political economy of protectionism suggest that variations in FDI policy across time and sectors might be either the consequence of differing understandings of the public interest by policymakers or, alternatively, a reflection of the varying demands of influential private vested interests. This study concludes that Australia’s FDI policy d...

Australia's foreign investment policy: an historical perspective

International Journal of Public Policy

The history of Australian foreign investment policy poses an explanatory challenge: why did a country long so open to overseas capital turn to more restrictive policy at the turn of the 1970s, only to significantly liberalise again from the mid-1980s through the early 1990s? Why has the regulatory apparatus of Australia's Foreign Investment Review Board (FIRB) been little changed over the last four decades, despite this latter significant liberalising policy shift? To address these questions some political economy issues inherent to FDI are first considered, and then the central role of foreign capital in Australia's historical development is discussed. The article subsequently explores the evolution of Australia's foreign investment regime and the confluence of economic. attitudinal and political factors that shaped policy outcomes at key historical junctures, particularly in the period from the early 1970s to the early 1990s.

Perspectives on Japanese Investment, Employment and Management in Australia

Asia Pacific Economic Papers, 1999

In the postwar period Japanese foreign direct investment in Australia has played a key role in strengthening trading links between the two countries and influencing the industrial structure of Australia. This paper surveys the pattern and intensity of Japanese investment in the 1990s as well as the motivations of Japanese investors-both in Australia and the rest of the world. It assesses the organisational and industrial distribution of investment, employment creation, and the conduct of industrial relations by Japanese firms in Australia, in a range of industries. The role of Japanese management and differences in the conduct of industrial relations in Japanese workplaces in Australia are considered in comparative perspective. The paper surveys the characteristics and outward orientation of these firms, particularly in the automotive industry-one of the largest areas of Japanese investment and employment in Australia. Overall, Japanese subsidiaries in Australia are considered to have relatively similar employment and industrial relations practices as other firms. Pacific Economic Papers mineral resources, such as coal and iron ore, to the establishment of a marketing network, and to the relocation of labour-intensive manufacturing industries (Komiya and Wakasugi 1990). By 1970 direct investment was only significant in the mining, lumber and pulp, and textiles industries. A decade later, the chemicals, steel, and electrical equipment industries had become active investors. FDI accounted for over 1 per cent of industry GDP, but half of the investment came from the manufacturing industry. The revision of the Foreign Exchange Law in 1980 removed an administrative obstacle to investment, since investors no longer required the prior approval of the Ministry of Finance, but were merely required to notify the Ministry of intended investment. The expansion of Japanese FDI in the 1970s was dwarfed by what was to follow, as both manufacturing and non-manufacturing industries increased their investment abroad, especially to the United States and East Asia. In the second half of the 1980s, following the sharp appreciation in the yen after the Plaza Accord, outflows grew very quickly.

Institutional Challenges and Response in Regulating Foreign Direct Investment to Australia

Economic Papers: A Journal of Applied Economics and Policy, 2009

Interest has recently been reignited in the question of foreign ownership and the regulation of foreign direct investment into Australia. This paper briefly outlines macroeconomic and political factors that make continued regulation of foreign direct investment (FDI) highly likely, perhaps even inevitable. We present an historical analysis of the development of the regulation of FDI in Australia that highlights the political and economic elements of that regulation. Lessons from such analysis may guide the formulation of current policy in regard to the regulation of FDI.

The handmaiden's tale: Japan's foreign investment as a reflection of its domestic economy

International Journal of Business and Globalisation, 2010

One aspect of globalisation has been the changing pattern of foreign investment in East Asia. The evolving pattern reflects both the objectives of potential investors and the constraints imposed by the host governments. Future trends should be heavily influenced by Japanese decisions since Japan will continue to maintain one of the largest economies in the region. Japanese direct foreign investment appears to have greatly redefined itself over the postwar era. However, our analysis demonstrates that the pattern of Japanese overseas investment has been a dependable reflection of its domestic economy as constrained by the political imperatives of the day. The fundamental changes now occurring within the Japanese economy will most likely herald a corresponding departure in the nature of its investment policy.

Japan and the Philippines' Lost Decade: Foreign Direct Investments and International Relations

The 1980s witnessed the economic transformation of many Southeast Asian economies but for the Philippines they were a lost decade in terms of economic growth. Arguably, external finance played a major differential role especially after the 1985 Plaza Accord when vast sums of foreign direct investments (FDI) flowed to Southeast Asia. In the case of the Philippines, external finance had been critical; to a large extent, her economic performance depended on funds from abroad. This dependence raises the importance of international relations to the country’s economic growth and sustenance. This study explores how international relations have affected financial flows, including Japanese FDI, to the Philippines during the1980s. It examines the period 1979-83 as a decisive period for the later distribution pattern of FDI flows. The argument is that FDI avoided the Philippines because 1) the domestic investment climate under the Marcos regime increasingly became inhospitable since 1979 and 2) Japan’s foreign policy and relations with other countries created a basis for Japanese FDI locational preferences later in the decade. The study revisits the 1983 balance-of-payments (BOP) crisis, which was a critical juncture in Philippine economic performance of the 1980s, if not of her long-term performance record. It proposes that the crisis represented the loss of international support to the Marcos regime. This loss of support produced serious complications that later resulted in the steep decline of the Philippine economy. The periods surrounding the 1983 crisis reflected conditions that made the country less attractive to FDI. Japan’s active involvement in Southeast Asia also became notable in the early 1980s. Japan’s foreign policy has been shaped by economic security considerations, which around 1980 included the economic and political stability of Southeast Asian countries. Particularly, world and regional events raised the strategic importance of countries along the Malacca Straits. The comprehensive security policy adopted meant that the “trilogy” of aid, trade, and FDI be stepped up in favour of these countries. Initial investments placed made these countries more attractive to Japanese FDI, particularly after the 1985 Plaza Accord.

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.