including © notice, is given to the source. FDI in the Restructuring of the Japanese Economy (original) (raw)

NBER WORKING PAPER SERIES FDI IN THE RESTRUCTURING OF THE JAPANESE ECONOMY

This paper examines how inward and outward foreign direct investment (FDI) have influenced the restructuring of the Japanese economy and can be expected to continue to do so in the future. We find that outward investment has helped Japanese firms to sustain foreign market shares and contributed to the restructuring of the Japanese economy away from older industries. By shifting from exporting to affiliate production, there has been a geographical reallocation of the activities of Japanese firms, particularly those of multinational manufacturing firms. However, Japanese outward FDI is still not very large relative to the Japanese economy, despite the rapid growth since the mid-1980s, and there is still scope for significant increase when compared with the levels of most other OECD countries. Inward FDI will presumably have an even stronger impact on the restructuring of the Japanese economy. Although the stock of inward foreign direct investment is still very small, there are important changes under way. Deregulation has opened up much of the industrial and service sectors to foreign multinationals.

FDI in the Restructuring of the Japanese Economy

2000

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.

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.

FDI and REGIONAL INTEGRATION: The Role of Japanese Multinational Corporations

In the early postwar era, Japanese FDI was relatively modest and limited mainly to the extractive and labor-intensive industries. During the five year period from the 1985 Plaza Accord to 1990, however, the amount and cases of Japanese FDI nearly doubles the totals of the previous 35 years, covering a broader range of industries. Since much has been written about Japanese production networks before 1997, my paper is a simple exploratory study on the changes in Japanese international production networks after the Asian Crisis and the implications this may have for regional integration. It is still too early to distinguish between recovery measures and broader organization changes. Therefore, I provide three before-and-after snapshots of Japanese foreign direct investments (FDI) in order to take a first cut at this issue. First, I examine the recent trends in and distribution of Japanese FDI and the resulting horizontal division of labor that has emerged among the Asia-Pacific economi...

Potential for inward foreign direct investment in Japan

Journal of the Japanese and International Economies, 2019

Kiyota gratefully acknowledges financial support from the Japan Society for the Promotion of Science (JSPS), Grant-in-Aid (JP16H02018, JP18H03637). All remaining errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Japanese aid as a prerequisite for fdi: the case of southeast asian countries

2009

Papers submitted for publication in this series are subject to double-blind external review by two referees.The views expressed in APEPs are those of the individual authors and do not represent the views of the Australia-Japan Research Centre, the Crawford School, or the institutions to which authors are attached.

Do Firm and Country–Specific Factors Matter in Japanese FDI and Trade Links?

2002

Our study investigates the firm-and country-specific factors that affect the link between foreign direct investment (FDI) and trade. Specifically, we address the questions "do country-and firm-specific characteristics matter in Japanese FDI trade links?" and "do the counts and values of FDI that are often alternatively used in the empirical work convey the same message about this link?" Empirically, our work integrates the models employed by Head and Ries (1999) with Campa (1993) to specifically address country and firm specific heterogeneities in the Japanese FDI-trade link. The panel data nature of this study also allows us to focus on individual host country characteristics as potential FDI and trade determinants. We find that Japanese manufacturing and non-manufacturing outward FDI flows during 1989-1999 were trade creating. However, we were not able to reject country and time specific fixed effects. There was no strong correlation between the counts of new Japanese manufacturing FDI and the value of FDI committed by these firms. Yet the FDI-trade complementarity was observed whether the count of firms or the value of FDI committed by these firms is used as a dependent variable. The economic potential of a host country, factor costs, openness to trade, and the strength and volatility of a host country's currency against Japanese Yen were important determinants of FDI inflow.

including © notice, is given to the source. FDI in the Restructuring of the Japanese Economy (original) (raw)

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